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Key things to keep in mind that will help to decide on your health insurance premium

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Published on April 23, 2021. EST READ TIME: 3 minutes

There is no dearth of insurance companies with each claiming that they have the best health policy to offer. As customers, we also want a policy with wide coverage and fewer exclusions. But as we expand the scope of coverage, we must understand that it will cost us more. The premium of the policy will sharply rise if we want more features and benefits to be added to the policy. While the health insurance premium may get affected by something that’s beyond our control like revised government rules, they also depend on individuals’ age, medical history, profession, location of stay, etc. But there are also several discounts that you can make the most of to reduce the burden on your budget. So, here we wanted to discuss some key points to keep in mind when deciding on how much premium you should be paying.

Factors that decide Health Insurance Premium

Health insurance premium is the amount that you need to pay to the insurer on a periodic basis for uninterrupted medical coverage as well as to keep the policy active. The cost of premium varies from one policy to another, but there are certain factors that are taken into consideration while calculating the premium such as:

1. Age: With age, the premium increases. This is because as we grow old, we are more susceptible to illnesses such as heart diseases, kidney disorders, etc. and the chance of filing claims due to a health issue is more.

2. Pre-existing illness: If you have no previous medical history, the premium will be lower. But if you suffer from any pre-existing illnesses, the premium will be on the higher side as you may require constant medical attention.

3. Policy tenure: The premium also depends on the policy tenure. A one-year health insurance policy will have a higher premium than one with a longer tenure.

4. Type of Policy: The health insurance policy that covers critical illnesses will have a higher premium than a standard policy. Similarly, the premium for an individual policy will be different than that of a family floater.

5. No-Claim Bonus (NCB): NCB is the discount that you will get on your insurance premium at the time of renewal for not making any claims during the tenure.

How to Reduce Health Insurance Premium?

• Higher Deductible: A deductible is the amount of money that the policyholder has to pay as part of the claim while the remaining amount will be paid by the insurer. This is an optional feature and if you go for a higher deductible, it will reduce the premium.

• Family floater: Under a family floater, all the members of a family are covered. Since the premium is not paid separately for each member, it is significantly less as compared to individual policies. On individual policies, the premium is paid separately for each policy.

• Long-term Policy: If you don’t want to compromise on the coverage, but want to reduce the health insurance premium, go for a long-term policy. In long-term policies, the premium is paid once and hence less compared to the annual policies. Moreover, insurers offer discounts on long-term policies.

• Thorough research: Before you purchase a policy, get quotes from different providers as the premium varies from one provider to another. Do thorough research, compare and buy the one that suits your needs and budget.

Conclusion

With healthcare costs going through the roof, staying prepared to meet any medical emergency is the need of the hour. Taking health insurance is a wise decision, but while doing so, do not purchase a policy because the health insurance premium is low. It may not give you extended coverage. Similarly, don’t end up buying a high premium policy randomly as it will only put a dent in your income. So, do thorough research and zero in on the one that will meet your requirement.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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