You can calculate health insurance premium using the health insurance calculator, which most companies offering health insurance offer on their websites
As the beenfits of a health insurance policy vary from plan to plan, its pricing also varies accordingly. So, how is health insurance premium calculated? What factors are considered by insurance companies while calculating the premium? It is crucial to know the answers to these basic questions before you buy a health insurance plan. Let's take a look at some of the key factors considered for health insurance premium calculation.
Age
Your age is the primary factor that decides the cost of the premium. The premium for a 25-year-old healthy individual will be relatively lower than the premium charged for a 35-year-old person. Health deteriorates with increasing age. Therefore, insurance companies charge less premium for younger people and more for older people.
Here's an example that will give you an idea about the impact of age on the premium (individual policy) for a Rs 5 lakh cover for a period of one year.
Family health history
Your family's health history and your current state of health are also considered while pricing your health insurance plan. Those who have a family history of certain illnesses like hypertension, diabetes, cancer, obesity, and stroke are more likely to suffer health issues in the later stages of their life.
Lifestyle and habits
Stressful working environment, lack of exercise, improper food habits, tobacco usage, etc, can affect your health. Prolonged smoking can lead to severe illnesses. Hence, insurance companies consider your lifestyle and habits while calculating the premium for your health insurance cover. Specifically, with tobacco usage and an unhealthy lifestyle, you may have to shell out more money to get comprehensive coverage.
Profession
Your choice of profession can impact health insurance premiums as well. Insurers charge more for people who work in a hazardous work environment in comparison to other professions.
Location
Your health also gets affected by the area or location you live in. People living in metro cities are more prone to pollution-related diseases in comparison to people living in smaller towns. Also, healthcare services are relatively costly in bigger cities. Hence, insurance companies charge more premium for people living in metro cities.
Pre-existing medical conditions
There are many illnesses that may arise due to the pre-existing condition. Your health insurance company may exclude that from the main cover. Health insurance policies might come with a certain waiting period to include pre-existing illnesses. Also, health insurance plans impose various conditions on such inclusions.
A policy that can cover major risks comes at a higher price. When you are already suffering from certain illnesses, you may have to spend more on your health insurance to get comprehensive coverage.
Calculating health insurance premium
Above-mentioned factors have a huge influence on the pricing of your health insurance policy. Hence, to buy the right plan, comparing the premium along with benefits is vital. It is quite easy to compare quotes of health insurance policies using an online tool called 'health insurance calculator'.
You can calculate health insurance premium using the health insurance calculator, which most companies offering health insurance offer on their websites. It can also be accessed on various web aggregator websites
Health insurance is an important decision that one should make to stay financially secured. Calculate health insurance premium and make an informed choice before purchasing the policy.
The writer is appointed actuary, Acko General Insurance
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Here's an example that will give you an idea about the impact of age on the premium (individual policy) for a Rs 5 lakh cover for a period of one year.
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