If you purchase a health insurance policy, the insurer assesses the risk level of your health while providing coverage. Based on that, the insurer calculates the premium price. The insurance premium calculation depends on the policyholder’s age, medical history, lifestyle, required sum assured, and more.
For example, 2 policyholders of the same age category and with the same policy might attract different premium amounts if one has a previous medical history of chronic disease and the other has smoking habits.
Explore this article to understand critical factors that impact calculating insurance policy premiums.
What are the Factors Affecting Policy Calculation?
Insurer calculates premiums based on several critical factors, such as the sum assured, the applicant’s age, and other personal variables. Find out the influential factors below:
- Age: Confused about how age determines premiums? Age is proportional to premium price. As people age, their organs naturally decline in function, making them more vulnerable to illness. Therefore, older policyholders pay higher premiums than younger ones because health risks increase with age.
- Medical History: Medical history plays a crucial role in influencing health insurance policy premiums. For instance, broken bones, chronic diseases, and previous surgery increase premium prices. On the other hand, people with a minor medical history attract lower premiums.
- Sum Insured: Sum assured significantly impacts premium price. It also changes proportionately with the premium. Choosing a high sum assured attracts higher premiums and vice versa.
- Lifestyle Habits: Lifestyle choices also play a critical role in determining premium prices. For instance, poor lifestyle habits, such as daily alcohol consumption and smoking, increase the premium as they increase health risk.
- Policy Type: Each health insurance policy serves different purposes with different assured sums. Therefore, insurance premiums vary by selected policy type, such as individual policies, floater plans, and women’s healthcare policies.
- Location: Location influences the medical cost. For instance, Tier 1 cities attract higher premiums than Tier 2 cities.
However, choosing the right insurer will attract a low premium with a proper sum assured. You must conduct thorough research before choosing your insurer. Check reviews, claim settlement ratio and portfolio before purchasing the policy. However, you may opt for Bajaj General Insurance, which provides a standard sum assured at an affordable price.
How to Use the Health Insurance Premium Calculator to Check Premium Price?
A health insurance premium calculator is a tool where you provide inputs such as the policyholder’s details, address and more to determine the premium of a certain policy. Find out the step-by-step guide below for determining the premium price of a policy.
Step 1: Basic Details of the Policyholder
Start by filling in the details of the policyholder. For floater plans, fill in the details of family members. Also provide address details in this step.
Step 2: Choose Sum Assured
The sum insured mainly drives the premium. Choose the sum assured according to your needs. For example, in floater plans, you must get a higher sum assured than the individual plan.
Step 3: Disclose Personal Health Information
In this step, you have to provide medical history and answer lifestyle-related queries. At this stage, the policyholder must stay honest to avoid claim rejection later on.
Step 4: Choose Your Add-Ons
In this step, you have to choose add-ons. You may consider separate coverage such as maternity, cancer and more based on your and your family’s needs.
Step 5: Check Premiums
In this step, you will get a clear number that determines your yearly premium. However, you can check them monthly, annually or quarterly. There is no requirement for phone calls or text messages.
Final Thought
Premium price is highly dependent on age, assured sum, medical history and more. Do not hide anything for a smoother claim. Providing manipulated information may increase the chance of rejecting claims. Now, with a premium calculator, calculate the premium price within a few seconds. Stay healthy and never let money compromise your health.
