Most of the people rely on their insurance companies to provide the details of their premium payment. Generally, online calculators help you calculate health insurance Policy premiums for different plans using your age, sum assured, family members to be insured, policy term and other related factors.
Ankit Agarwal, CEO and Co-Founder, BimaDekho.com said, “Calculation of health policy premium facilitates the task of customizing the policy. It lets you customize the policy by modifying factors like sum assured and eases the buying process.”
Here are some of the factors that affect your policy premium:
Ages: a health insurance The premium paid by people in their 20s or 30s will be nominal as compared to the premiums paid by an older person. Generally, insurers consider the risk premium (mortality rate) for each age, and this is included when they finalize the premium amount for health policies.
Revised Community Rating: It factors in a wide range of factors to calculate the premium for an insurance product. It mainly includes a region’s political stability, geographic location, trade activities and lifestyle in a specific area. Here, the insurance provider insists on a base rate that can be charged for a group that has similar characteristics such as gender, family size, age, occupation and geographic region.
Medical Insurance Underwriting: When you fill out the application form, it contains all the information about your risk profile. Underwriting involves understanding the applicant’s risk by studying such information. Insurance companies follow underwriting guidelines to determine whether someone is eligible for coverage and how much premium an individual must pay.
Family medical history: While purchasing a health policy, you need to submit your detailed medical history to the insurer. If you are healthy and do not have any pre-existing diseases, the premium may be lower. Aggarwal said that family history without any major illness fetches cheaper premiums, whereas with recurrent diseases it means higher premiums. “Furthermore, people with higher body mass index are generally charged higher premiums than lower premiums due to higher risk of contracting diseases,” he added.
Co-payment facility: While getting health insurance, the premium drops if you decide to opt for the co-pay option. Many policies have an inbuilt co-payment option. In co-pays, policyholders typically pay a specific percentage of the total claim amount, and the insurance company pays the rest.
Inclusions and Exclusions: Policies with fewer exclusions will cost more. Most policies cover medical expenses for more than 24 hours during hospitalization, including drug bills, ICU fees, room charges, and doctor’s fees. But the policy has some exclusions. The insurer may or may not cover certain diseases in a particular policy. Therefore, you must check the terms and conditions of the policy before purchasing the policy.
“Policyholders should be aware that permanent exclusions such as obesity, AIDS, smoking-related treatment and self-caused injuries are not covered,” Agarwal said.
Points worth noting: You also get the option of Equated Monthly Installments (EMIs) to pay your health insurance premiums if the annual premium of your policy is high enough.
Using this option, you can pay a fixed amount every month for a high coverage health plan as per your comfort level, without worrying about paying huge annual premiums every year.
Premiums may fluctuate depending on factors such as age, location and prevailing taxes or GST.
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