Health Insurance 1664 views March 8, 2019

What Factors Determine Health Insurance Premiums?

Rising healthcare costs have forced people to look for health insurance policies that promise to reimburse the amount spent of hospitalization and consequent medical care or ensure that policyholders avail the benefits of cashless medical facilities as the claim amount gets settled between the insurer and the healthcare provider. Health insurance companies promise all these benefits in return for regular premium payments.

Health Insurance

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While determining eligibility for a customer to buy health insurance, insurers look at the various risk factors that they had compiled using historical data, detailed product research, and frequency of the claims made. Premium rates vary from one insurance company to the other. Also, premium rates for the same health insurance plan may differ between any two customers. This is because of certain underlying factors affecting health insurance.

Major Factors Determining Health Insurance Premiums

Some of them include:-

Pre-Existing Medical Conditions

The customer looking to buy any health insurance plan has to provide medical records to ensure that the insured are not suffering from any kind of pre-existing illnesses. If the customer has submitted previous health records, thus, underscoring illnesses that he or she may have suffered in the past, the health insurance company has the right to accept or reject the application for granting health insurance. If the insurance company rejects the policy application, then the customer may have to apply to another company that may agree to grant the required cover, albeit at higher premium charges.

Medical History in the Family

Genetic disorders pose a great risk to the prospective policyholder suffering from similar problems in the future. With a medical history of disorders including heart problems, cancer or any other, there is a high risk of the policyholder being diagnosed with similar problems, thus, prompting greater premium payments.

Body Mass Index (BMI)

No matter how discriminatory it may sound, the BMI of a person is one of the factors that determine the amount of premium he or she has to pay. Customers with a high BMI and seeking health insurance are charged more than those with normal BMI. Health insurance companies in India argue that people with higher BMI are more prone to suffer from diseases including heart disorders, osteoarthritis, high blood pressure, diabetes, cancer, and many others. Considering the high quantum of risk associated with their illnesses, it is quite possible that people diagnosed with high BMI may be affected with critical illnesses in the future, thus, begetting expert medical help.

Lifestyle Habits

Despite continuous warnings against heavy alcohol consumption and smoking or chewing tobacco or sniffing snuff, some people are unable to get rid of the addictive effects of the substances, thus, making them susceptible to critical disorders like cancer. Customers need to share their smoking and drinking habits while applying for any health insurance plan in India. Insurers have the option to either charge high premium rates or reject the health insurance proposal on grounds of harmful lifestyle habits.

Differential Premium Pricing

Don’t blame health insurers for being biased as they maintain how mortality rates for women are lower among women than that of women though past records show a steady increase of women being affected with lifestyle diseases. Also, low penetration of the concept of health insurance has compelled health insurance companies to follow differential pricing strategy to lure more women to buy these plans.


Age is an essential factor that one must not ignore. As older people are more like to be hospitalized to seek medical treatment, and hence make health insurance claims, those buying health insurance at an early age have to pay lower premiums than their aged counterparts.

Professional Hazards

Your choice of profession is one of the decisive factors when it comes to determining your health insurance premiums. If the customer is employed in a profession that involves risks of suffering from physical injuries or is continually exposed to radiations and hazardous chemicals, then health insurance companies charge higher premium amounts as such people are more likely to be afflicted with heart diseases.

Buying health insurance is a must considering the growing likelihood of people suffering from some kind of disease or the other. The fragility of life cannot be ignored; however, with a health insurance plan in place, one can seek the best possible medical treatment without worrying about the burdening costs. Buy one today to ensure that you and your loved ones are not deprived of necessary medical attention, if and when required.

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