Tips to Remember While Calculating Health Insurance Premium
When it comes to health insurance, the premium is one of the most crucial factors. It is the amount that you pay for the coverage that the health insurance provides. These premiums can be expensive and hence, it is vital to know how they are calculated and the factors that impact your health insurance premium.
While you may use a health insurance premium calculator, there are several other factors that you must keep in mind. Here are some tips that can help you understand how health insurance premiums are calculated so you can make the right choice!
Factors That Affect Your Health Insurance Premium
- Considering the age of insured members
Age is one of the most vital factors that impact your health insurance premiums. Age and gender determine the chances of possible claim filing and the higher the age, the more the healthcare needs and chances of a claim. And hence, for older family members, the premium amount is higher. Likewise, women tend to have higher healthcare costs than men, and hence their healthcare premiums are often higher. A health insurance calculator is your best tool to compare premiums.
- Medical history
A health insurance premium calculator also takes into account the medical history of the policyholders to calculate the premium. For those with a history of chronic diseases like diabetes, blood pressure or heart disease, the risk of a claim is higher, and hence, the premium amount is also high. Additionally, in case of preexisting conditions like asthma, some insurance companies may either deny offering insurance or charge a higher premium.
- Lifestyle Factors
Your lifestyle choices can also impact health insurance premiums. For instance, if you are a smoker or alcoholic, then your premium amount may be relatively higher than those who refrain from these products. The reason is that smoking and drinking are associated with a higher chance of developing health issues like heart disease, lung cancer or even stroke. Additionally, a higher BMI or sedentary lifestyle may also lead to higher premiums. Your health insurance premium calculator will consider these when deriving the premium amount.
- Geographic Location
While many of you may not be aware, where you live can also impact your health insurance premium. This is because, healthcare costs can vary depending on region and hence, this is an important factor that impacts premiums. For instance, living in a metropolitan city will have a higher cost of living and hence, the premium will be higher than for those living in tier 2 or tier 3 cities.
- Deductible and Co-Pay
The payment options you choose also affect your health insurance premium. Co-pay refers to a percentage of the claim amount that you agree to bear you’re your pocket whereas the deductible is a fixed amount that you have to pay for each claim.
- Coverage Amount
The amount of coverage you select can also impact your health insurance premium. If you choose a policy with higher coverage, you will end up with a higher premium and vice versa. More comprehensive health coverage will also cost higher than basic health coverage.
When you calculate your health insurance premium using a health insurance calculator, insurers take into account various factors that may impact the premium. Having an understanding of these will help you choose a policy that not just fits your family’s needs but also your budget. In addition to the above-mentioned factors, your credit score may also impact your insurance premiums.
