How is Your Health Insurance Premium Determined?


5 min read

Health insurance provides financial support during medical and health emergencies. To continue availing the coverage benefits of a health insurance plan, it is required to pay a premium by the insured to the insurance company. But do you know what all factors are considered to determine the premium when buying a health policy? Let’s find out! 

Although most premiums are paid annually (for one-year health insurance plans), however, there are two and three-year health plans that you can choose to buy. Health insurance companies use their own set of parameters to fix the premium price of your health insurance. This amount is fixed after analyzing the customer profile in terms of various aspects. Also, the insurer decides whether to accept or reject an applicant’s health insurance application, depending on their team’s assessment. Let us discuss the important factors that determine a health insurance premium.

Factors that Determine a Health Insurance Premium

Several factors are taken into consideration while calculating the premium of a health insurance policy. Below are some points to consider:

1. Age and Gender of the Applicant:

We know that the premium of medical insurance is related to the policyholder’s age. With the increase in the applicant’s age, the policy premium also rises. This is because, with age, the health issues of individuals increase, and so does the probability of getting critical diseases. Thus, these people are more likely to file for frequent insurance claims. And so applicants above the age of 40 years are charged a higher premium for their health insurance as compared to young people. However, women are charged a lesser premium than men because women are thought to be less prone to diseases than men.

2. Type of Health Insurance Plan:

The premium of your health insurance policy also depends on the type of health insurance plan that you opt for. There are different types of health policies that are available. For example, individual health plans, family floater plans, senior citizen health plans, etc. If you buy an individual plan, the premium would be higher than family floater plans. Similarly, premiums of critical illness insurance plans are generally on the higher side. You can use a mediclaim premium calculator available online to estimate the premium amount of your health insurance. The calculator will help you to evaluate the premium of different plans, which you can use to compare plans that suit your requirements.

3. Pre-existing Diseases:

Pre-existing diseases are the illness that an insurance applicant is already suffering from at the time of buying a health plan. A person with pre-existing diseases is likely to raise frequent health claims, and hence they are charged a higher premium amount. Generally, health insurance policies cover pre-existing diseases after 2 to 4 years of buying the policy. Despite that, the premium price for people suffering from such diseases is more. Thus, people with health conditions like BP (blood pressure), diabetes or thyroid etc., have a greater chance of getting their insurance rejected. And even when offered, they come with an exorbitantly high premium. Hence, buying health insurance when you are young is recommended for a lower premium rate.

4. Family Medical History:

A family’s medical history is also a strong determinant when considering the health insurance premium. When buying a policy, the insurance company does a health background check in terms of your family’s medical history. And depending on the health of each family member, the premium of your insurance is decided. The insurer checks if there is a history of any particular disease that runs in your family, which the applicant might also be vulnerable to.

Some insurance companies also ask the policy seeker to undergo pre-medical health screening if they are above a certain age. On the other hand, many insurance companies make it compulsory for every applicant to go through pre-medical screening.

5. Lifestyle:

Lifestyle does play a pivotal role in the health of a person. Chain smokers and regular alcoholics might be denied health insurance coverage. This is because they are prone to diseases. However, some insurers might offer policies to such people at an exorbitantly high premium price.

A high premium is also charged to people who have given up on smoking and drinking as the effects of these habits last long. Hence, there is an increasing risk of such people getting sick and filing claims. And so, they are charged a higher premium amount.

Benefits of Calculating Premium with a Health Insurance Premium Calculator

The health insurance premium calculator is an online tool that can be used to calculate the premium of your health insurance policy. You can use this tool to calculate the premiums of different policies and choose the best plan per your requirement and pocket. Here are some benefits of using an online health insurance calculator tool:

  • The tool makes it easy to compare and estimate the premiums of different health policies within a fraction of second
  • The tool is a simple and cost-effective way to choose the most suitable health plan as per your need
  • The online mediclaim policy premium calculator allows the applicant to have a fair idea of premiums charged by health insurance plans of different insurance companies
  • This way, the applicant can pick a policy that is ideal as well as affordable
  • The online calculator serves as an economical and efficient tool to help applicants make an informed decision about insurance purchase
  • Most importantly, it saves the hassle and time of meeting and understanding insurance plans from insurance agents. It is a fair and impartial way of picking a policy without any pressure
  • Also, most health insurance companies offer online mediclaim policy calculators on their official websites. Interested applicants can visit the portal of the insurer and use the tool to know the mediclaim premium and sum insured of different plans

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To Conclude

The mediclaim policy premium is a fixed amount that the insured must pay to the insurer to avail the health insurance policy coverage. This is determined by the type of coverage, sum insured, and lifestyle, among other factors. Buying a health plan early on in life is better to get an enhanced deal at a low premium.
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FAQs: How is Your Health Insurance Premium Determined?

Can I estimate the premium for health insurance plans for families using a premium calculator?

Yes, it is possible to estimate the premium of health insurance policies for family floater plans using a premium calculator.

Can I estimate the premium for an INR 5 lakh health insurance plan using a premium calculator?

You can calculate the premium of INR 5 lakh health insurance plan or any other amount using a health insurance calculator.

What are the possible determinants of health insurance premiums?

Your insurance premium is based on age, past medical history, Gender, occupation, type of health plan, lifestyle etc.

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Jan 01, 2024
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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