Health Insurance Premium

Health Insurance Premium in India

The attitude towards securing necessary medical treatment has undergone a wide change in the past few years. Thanks to the increasing importance of health insurance as an essential financial planning tool, more people are now able to access necessary medical care to live healthy lives. This is because buying health insurance policies early in life helps defray the rising cost of medical care in the long run. But, the benefits of having a health insurance plan in place come at the cost of paying health insurance premiums. Premium is nothing but the amount customers have to pay each month to buy health insurance coverage.

Different insurance companies in India charge varying rates of health insurance premiums depending on the nature and extent of health insurance coverage promised. While choosing among the different options available, customers tend to focus on the premium charges involved as opposed to the medical cover sought. However, it is important that interested customers pay attention to not only the premium amounts that are to be paid but the benefits that they would gain after buying some particular health insurance plan.

Major Factors that Affect the Health Insurance Premium

Health insurance premiums are not chosen randomly. In fact, there are myriad factors that can affect the premium rates and come into play while calculating them. Some of them include:-

Age of the Customer

This is one of the primary factors that insurance companies take into account while calculating the amount they wish to charge as health insurance premiums from their customers. Buying health insurance plans early or when young necessitates lower premium charges while the premium charges are more for those buying at a later stage. This is because young people are less likely to fall ill or suffer from serious disorders. As opposed to them, older customers are more vulnerable to be afflicted with grievous illnesses, thus, raising the risk of being hospitalized and making health insurance claims.

Gender

Health insurance policies sold to women cost lower than those bought by men. This is because women are less prone to suffer from grievous disorders including heart disorders, kidney ailments, cancer, etc. The risk of women getting hospitalized and treated for prolonged periods is relatively low, thus, implying lesser liability on the part of the companies to pay for their medical treatment.

Existing Health Conditions

The current health condition has a determining effect on health insurance premiums too. Customers suffering from obesity or pre-existing disorders like diabetes are at a greater risk of falling ill and seeking treatment for their health problems, thus, raising the risk of insurance companies selling them health insurance to cover their medical expenses in future.

Pre-existing Disorders

People diagnosed with some serious health problem before buying health insurance cannot avail its benefits immediately after buying the policy. In fact, most insurance companies will cover the medical expenses arising from their treatment only after the completion of a specific waiting period ranging from three months to two years. In addition, complications stemming from pre-existing disorders may not be covered. Insurance companies selling health insurance plans to customers detected with any serious medical problem before buying the policy will always charge them premium rates higher than others.

Tenure of Policy Period

Paying premiums for a one-year health insurance plan is different from paying for prolonged health insurance policies extending to two or more years. Depending on the guidelines laid down by different insurers, policyholders may have to pay more or less amount of premium charges.

Customer’s Location

The place of living has an effect on one’s lifestyle and consequently health conditions. This explains why policyholders living in metropolitan cities pay higher health insurance premium charges than those residing in rural areas. In addition, the amount expended on treatment in cities is more than villages, which explains the greater premium amount.

Lifestyle Habits

Smoking, drinking or staying out for late-night parties can affect one’s health conditions adversely. Since these habits increase the risk of suffering from diseases or susceptibility to various unforeseen disorders or critical illnesses, the chances of buying comprehensive health insurance coverage at lower premiums are considerably reduced, thus, explaining high premium charges to be paid every month.

No Claim Bonus (NCB)

The principle of NCB comes into effect when customers are applying for renewal of their health insurance policies. The amount of No Claim Bonus (NCB) that the insurance company allows may range between five and 50 percent, which means that existing policyholders can enjoy discounts on premiums depending on the NCB value.