Every insurance company has specific guidelines based on which they decide the premium cost. Here are the factors that they consider while determining the medical insurance premium.
The rising cost of medical treatment and the recent COVID-19 pandemic have made people realise the importance of health insurance. While it can serve as a financial safeguard in case of unexpected medical emergencies, one important thing to consider is the amount of premium that customers are required to pay for the coverage.
The health insurance premiums are calculated based on different factors. These include the following, as compiled by Rahul M Mishra, Co-Founder & Director, Policy Ensure:
The cost of medical treatments and procedures is increasing every year, which can result in higher insurance claims and subsequently higher premiums.
Age of the insured
As individuals age, they are more prone to developing health conditions that require medical treatment. This increased risk can lead to higher insurance premiums.
Pre-existing medical conditions
Individuals with pre-existing medical conditions, such as diabetes, high blood pressure, or asthma, may require more medical attention and treatment, which can result in higher insurance premiums.
This means that they will have to pay more compared to healthy people of the same age group, as they are. The premium increase will depend on the severity of the disease as noted by doctors.
Unhealthy lifestyle choices such as smoking, drinking, and lack of exercise can increase the risk of developing health conditions, which can lead to higher premiums.
Healthcare costs and medical treatment expenses can vary depending on the location in India, which can impact the premiums charged by insurance companies.
The coverage and benefits offered by a health insurance policy can impact the premiums charged. Policies with more comprehensive coverage and higher limits can result in higher premiums.
Individuals who have a history of making frequent insurance claims or filing for large claims may be considered higher risk, which can result in higher premiums.