6 Ways to Lower Your Individual Health Insurance Premium

Posted on: Oct 7, 2024 | 3 mins | Written by: HDFC ERGO Team

6 Ways to Lower Your Individual Health Insurance Premium

Health Insurance is today’s version of godsend gifts to mankind. The rate of pollution, global warming, and other environmental factors, as well as manmade calamities, have made it extremely difficult to maintain good health.

From the food you eat to the air you breathe, everything has its drawbacks in this era. Not to mention, lifestyle habits and carelessness can often unexpectedly put you in the hospital. These sudden financial responsibilities can become hard to navigate, which is why you opt for health insurance. However, the premium rates seem daunting.

Instead of allowing premium rates to discourage you from availing suitable and sufficient health insurance coverage, let’s discuss a few ways to reduce the premiums. You will be surprised at how much money you save over time by simply adhering to a few steps, thus ensuring a smooth treatment and claim process.

Useful tips

In order to reduce your premiums, you can follow these simple and doable steps. You may not notice at first, but these hacks end up saving you a lot of money over the course of your financial planning:

1. Start purchasing health insurance at a younger age

It is always good to start purchasing health insurance when you are young. As you age, natural changes in the body cause your immunity levels to fall and make you susceptible to health issues.

Health insurance requires you to provide your medical history. The older you get, the more illnesses and ailments start affecting you. They raise the chances of frequent claims, thereby increasing your premium. By opting for early health insurance policies, you maintain a steady record of your health and reliability with the insurance provider.

2. Change your lifestyle

Smoking, drinking, and other vices may seem cool but they negatively impact your health over time. You may not notice the damage soon enough but with age, the diseases set in, including liver damage, collapsing lungs, bronchitis, etc. These issues will pop up when you go for health checkups, thus notifying your insurance provider that you are a liability to your own health.

In order to reduce your premiums, change your habits and lifestyle, opt for healthier living with organic fruits and vegetables, reduce smoking and consumption of alcohol, and take care of your overall health. When you take care of yourself, the health insurance provider takes care of you too with lower rates of premium.

3. Add riders to your individual health insurance

Certain riders or add-ons can help you improve the benefits of your health insurance plans over time. With inflation, your need for sufficient coverage also increases. However, your premium will be affected if you don’t take precautions.

Riders such as No Claim Bonus, Restore Benefits, etc., help increase your sum insured without increasing the premium plans. They may not particularly reduce the premiums, but you get additional benefits without having to pay extra money for medical emergencies.

4. Purchase longer tenures

Did you know that you can purchase certain health insurance plans for several years at the same rate of premium? The benefits correlate with the point above wherein inflation rates do not affect your health insurance coverage.

Let’s say you purchase health insurance for a year. When renewing your plan, your premium rates may rise every year. However, if you purchased a plan with 3 years tenure, you pay the same premium in the first, second and third years of your plan. There are no increments and your sum insured remains the same throughout the tenure of your health insurance policy.

5. Activate top-up plans with base health insurance

Another way to reduce your premiums is by purchasing additional top-up plans over your base individual health insurance policy. Its benefits include the fact that you can purchase a base plan that offers lower coverage; thus, your premium rates are low as well. Then, you purchase top-up plans to increase your coverage. You will need to pay premiums for those, too, but in aggregation, the total premium may be reduced.

6. Opt for deductibles and co-payment plans

If you do not want to pay high premium rates for add-ons, top-ups, or even the base plan, you can go for deductibles and co-payment options.

Deductibles work almost as top-ups. In cases of medical emergencies such as paying for diagnostics, hospitalisation, treatments, etc., you must pay the costs from your pocket. Afterwards, you can claim the amounts from your health insurance provider using relevant bills and receipts.

Co-payment plans require you to shell out a certain amount of money on your own before the health insurance provider comes to your rescue and pays the remaining sum. Simply put, you could get an INR 3 lacs policy with lower rates of premium. However, your health insurance contract will specify a certain amount, let’s say INR 1 lac, that you need to pay first to the medical establishment.

So, when admitted for treatments, you must first pay INR 1 lac on your own. Then, if there are more bills to pay, the health insurance will cover the costs up to INR 3 lacs, which is your sum insured.

These two specific types of payment plans help reduce the premiums but you may end up paying a lot of medical expenses from your pocket, so plan accordingly.

It is always ideal to treat health insurance like a financial tool and plan the expenses towards it accordingly to save money over time.

Conclusion

You can reduce your premiums by making simple changes to your lifestyle, thus improving your health. Not only does it pay off financially, but it improves your quality of life. Also, don’t underestimate the value of health insurance riders. These add-ons may seem like an additional financial burden at first sight, but they pay off in benefits, thus saving you a huge sum of money in the long run.

While you can reduce your premiums with unconventional methods such as deductibles, co-payments, lower base health insurance coverage, etc., keep in mind that when admitted for treatment, you may end up paying a lot more in medical bills. Therefore, it is better to opt for riders and longer tenures on health insurance. Also, consider purchasing it early in life to maintain a steady premium rate rather than a humongous starting amount when you are older and more prone to illnesses.

FAQs

1. What factors influence health insurance premiums?

The rate of premium for your health insurance relies on a number of factors as follows:

Your age, your geographical location, your gender, your habits (diet, smoking, drinking, etc.), medical history, the total sum insured and coverage of the health insurance plan you choose.

2. If I pay a lower premium, does that affect my coverage?

Actually no. The lower premium rates are offered for a number of viable reasons, including no claim bonuses. If the individual health insurance plan that you choose offers a high sum insured but a low premium, it is probably since you made no claims in your previous tenure, or your health and lifestyle history is impeccable. The health insurance provider commends your reliability with a lower premium rate.

3. Is individual health insurance cheaper than a family floater plan?

It depends on the type of individual health insurance policy and your total coverage. The aim is to acquire enough sum insured and coverage in cases of unforeseen medical dilemmas. If you have chronic illnesses or live in a place that has higher risks of pollution-related health issues, accidents, etc. it is likely that your premium will be higher, regardless of whether you opt for an individual or family plan.

However, in general, individual health insurance is cheaper than family floater plans as the latter covers more than one person under the policy. Therefore, the premium rates are slightly higher, but the benefits extend to several family members, which makes it cheaper on an individual scale.

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

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