How is your health insurance premium determined? All you need to know

Here is all you need to know about the factors that influence your premium calculation:

The insurance companies generally follow the rule of thumb -- higher the age, higher the premium amount. This is because older people above the age of 40 are more at risk of suffering from an illness that may result in a claim. Therefore, it is advisable to buy a health insurance at a young age so that you can get comprehensive coverage and better benefits at an affordable premium. Also, women are charged a lesser premium by most insurance companies.

Most online health insurance premium calculators have this factor upfront that raises the premium amount. Since smoking raises the chances of fatal diseases the insurance companies charge a higher premium to cover those. Also, if a person smokes 10 or more cigarettes a day, some health insurance companies might deny the giving the policy, while others will charge extra.

Also, if a person lies about their consumption habits and the insurance company finds about it later, then the policy might get cancelled.

Individuals with pre-existing illnesses are more likely to file a claim, hence, insurance companies charge a higher premium to cover that risk. However, most health insurance plans cover pre-existing illnesses after 2 to 4 years of the policy, the certainty of filing a claim is always more.

Thus, for applicants with pre-existing illnesses such as blood pressure, thyroid, and diabetes the chances of rejection or costly premiums are higher.

The insurer would ask for your and your family’s medical history to determine the premium cost as it reflects whether you are at risk of certain diseases that run in your family.

Most insurers require the applicants of a certain age-group or all applicants to undergo a pre-medical screening to determine the premium costs.

Your nature of work and the amount of risk involved in your work is also an important factor for insurers to determine premium charges. If you’re exposed to dangerous machines or other elements that can harm or affect your health, then your premium charges will also be higher. Similarly, if you working conditions are risk free, your premium would be lesser.

The premium payments will also vary depending on the type of health insurance cover you choose. There are group health insurance policies, family floater and individual policies. Generally, group health covers or corporate insurance premium cost less as they cover a bulk of people. On the other hand, a family floater costs more since there is a higher risk as it covers the entire family. Individual policies cost lesser compared to family floater policies.

Also, add-on covers purchased in addition to the policy cost more resulting in higher premium charges.