How is Your Health Insurance Premium Determined?
What does health insurance premium mean? It is the amount you pay the insurance company to get health insurance coverage. For this, you can get several health insurance quotes from different providers to compare the price of the premium.
But what determines the cost of health insurance premiums? This blog will delve into how your health insurance premium is determined.
How are Health Insurance Premiums Calculated?
Below are some factors that determine the health insurance premiums-
Type of Health Insurance Plan
The type of health insurance policy you purchase determines your premium. If you purchase a critical illness policy, your premium will be slightly higher. The premium of an individual health insurance policy will differ from that of a family floater policy.
To know the accurate difference, you can calculate health insurance premiums online using a health insurance premium calculator.
Pre-Existing Medical Conditions
Most health insurance plans cover pre-existing diseases after a specific policy period. Individuals with a pre-existing medical condition are more likely to file an insurance claim.
This is why health insurance providers consider it an expensive affair. Therefore, for individuals with diabetes, blood pressure,thyroid problems, etc., there are chances of the policy premiums being higher. For this reason, it is recommended that they purchase health insurance at a young age.
Lifestyle
If you consume alcohol regularly and smoke daily, your insurance provider can deny you medical insurance coverage. There are some insurance companies that provide insurance coverage for such risks, but this would be compensated with a higher health insurance premium cost.
The negative effects of alcohol consumption and tobacco consumption last longer. This is why individuals who quit alcohol are also exposed to consequent diseases and have a higher chance of filing a health insurance claim. Insurance providers charge them higher premiums as they are more vulnerable to critical illnesses such as kidney failure, cancer etc.
Age and Gender
As the applicant’s age increases, the health insurance premium cost also increases. With age, health problems also increase. This is why applicants in the older age group are charged higher health insurance premiums, as they have a higher chance of filing an insurance claim due to health problems.
Additionally, females are charged a lower health insurance premium than men. The main reason behind this is that several health conditions affect men more than women.
Family Medical History
The family medical history also determines the premium cost. It is necessary to check if certain medical conditions run in your family and if you are exposed to such health risks. Most insurance providers require the policyholder (of a certain age group) to undergo a pre-medical screening.
While some insurance providers make it mandatory for all policyholders irrespective of their age group, for instance, if any of your family members have diabetes or thyroid, they become more exposed to various other health problems.
Therefore, their health insurance premium will be higher than that of someone with a clean family medical history.
To Wrap It Up
The health insurance premium is based on different aspects, including age, gender, family medical history, lifestyle, pre-existing medical conditions, type of health insurance coverage, add-ons and more.
It is essential that you understand each of these aspects to determine the closest premium estimate. You can also utilise a health insurance premium calculator to calculate your health insurance premium accurately.
