In times, where the cost of healthcare is on the rise, it is imperative to secure your health and savings with health insurance. It is a reliable financial instrument that extends firm support in times of medical needs. Yet, health insurance is not often considered a natural investment option for many people. One of the main reasons for this is the cost of health insurance, in other words, health insurance premiums. Understanding how health insurance premiums work is significantly important to be well-informed about future choices. Health Insurance premium, unlike many other products, is not the same for all. The same health insurance insurance plan’s premium can be different for two different consumers. The reasons for this are many. Let us take a look at it. Age Factor Age plays an important role in deciding the cost of your health insurance. As people age, the associated health risks will increase in general. This implies that elder people tend to claim more compared to younger ones, as a result, the risk of the insurers is typically higher. Hence, usually, the health insurance premiums are set a little higher after considering people’s health risks based on their age. This is the main reason why it is advisable to buy health insurance at an early age. Pre-Existing Diseases Pre-existing diseases such as diabetes, high blood sugar, etc., play a significant role in determining one’s health insurance premium. People with PED conditions may require regular hospital visits, hospitalisation, outpatient care, medications, etc. Therefore, their healthcare expenses are comparatively higher than those who do not have PED. Due to this, the premium for people with PED conditions will usually be higher. The premium also varies based on the type of pre-existing condition and its severity. It is important to consider your medical history and choose the plan that caters to your needs. Lifestyle and Habit Before purchasing health insurance, people need to disclose information about their lifestyle. Your lifestyle plays a significant role in determining your premium. Some lifestyle habits can adversely impact people’s health such as smoking and drinking. Due to this, their healthcare expenses can go high. This leads to higher health insurance premiums. For instance, the health insurance premium of a smoker can cost some thousand rupees extra compared to the premium of a non-smoker of the same age. Co-payment and Deductibles Co-payment and deductibles are cost-sharing agreements between the insurer and the insured. A deductible is the amount you pay for your medical expenses for a policy period before health insurance claims kick in. On the other hand, a co-payment is the percentage of the claim amount that you agree to share for each claim. Both these co-pay and deductible clauses impact your premium. A higher co-pay and deductible leads to a lesser premium because your out-of-pocket expenses during a claim go high. Similarly, choosing low co-pay and deductible can lead to higher premiums. Family Health History Just like an individual’s health history, family members’ health history can also affect the premium of family health insurance plans. If you are the proposer, and if any of your family members have a pre-existing condition, then the overall premium of your family health insurance plan will increase. Hence it is a wise decision to purchase separate health insurance for parents, especially if one of them age above 60. Because senior citizen health insurance plans are specially curated to address elderly healthcare needs, you can get coverage at a reasonable premium instead of adding them to your family health insurance. Nature of Job Health Insurance premiums vary based on the nature of your work. Your premium can be high if you’re involved in risky works, for example, working at a construction site or factory. Similarly, if your work is less risky such as office jobs, then your health insurance premium will be lower. To Sum Up Various factors contribute to higher premiums apart from those mentioned above. Add-on coverage and the sum insured can also affect your health insurance premium. However, you can claim tax deductions for paying health insurance premiums under Section 80D of the Income Tax Act, 1961. With the rise in medical inflation, it is crucial for you to purchase health insurance as early as possible.
