Five Things That Affect Your Health Insurance Premium
“It is health that is real wealth and not pieces of gold and silver.” – Mahatma Gandhi
Good health will give you the ability to pursue your dreams. Without it, you will not be able to do day-to-day tasks. As a result, millions of people around the world are known to take efforts to keep their body healthy and fine.
Despite all the best healthcare tips and lifestyle changes, certain ailments or medical conditions are inflicted without warning. Their treatment can burn a large hole in your pocket and push you to borrow money. To averse such conditions, you should buy a health insurance plan.
Health plans are priced after considering several factors. Insurers assess these factors to finalize the appropriate premium for the plan. Here are the top five things that every health insurance companywill consider before calculating the final premium.
1> Personal history
- Your healthcare expenses can be predicted by your current medical conditions. That’s why insurers ask for vital body stats, past medical history, family history, personal habits (smoking/drinking), etc. to foretell the best health cover or sum insured amount.
2> Mortality Rate
- This is an in-house assessment parameter that differs from company to company.
- In layman terms, insurers say Mortality rate increases with the age of the person. However, there is a direct co-relation of this quantity with lifestyle related ailments such as diabetes, hypertension, obesity, and others.
3> Administrative/marketing expenses
- Any health insurance calculatorwill only give a brief estimate of the premium to be paid for a particular sum insured amount. However, during the processing stage, administrative and marketing expenses are also added to the total payable premium. These charges can be a flat amount or certain percentage of the total sum insured.
4> Medical Underwriting
- The process of medical underwriting does not directly affect the premium to be paid for a health policy. However, it will surely affect the covers offered by any plan. Moreover, this practice also plays a key role during claim settlement with respect to covers claimed.
5> Modified Community Rating
- Certain communities or people living in peculiar geographical conditions are prone to particular medical conditions. Insurers are known to offer separate covers to target such ailments. Thus, the total premium to be paid gets altered.