Factors affecting premium of Health
Insurance
Like any other insurance, the premium for Health insurance also depends on some
factors which determine the amount we pay out. At times we generalize paying out
the premium as an expense, but remember it is only a precaution for a secure future!
It can save us huge loss if the coverage is planned carefully.
- Age is a major factor that determines the premium, the older you are the premium
cost will be higher because you are more prone to illnesses.
- Previous medical history is another major factor that determines the premium. If no prior medical
history exists, premium will automatically be lower. However, if you had suffered
from specific illness the premium may turn out to be expensive.
- The premium cost also depends on the work environment of the insurance buyer. Supposedly the
premium of a pilot will be more expensive than that of a teacher, or premium of
a miner will be expensive. This is because the job of a pilot and a miner are more
hazardous, thus they are more prone to disorders and risks than a teacher.
- Term of the policy helps in determining the premium, the longer the term the cheaper
is the premium and vice versa.
- Claim free years can also be a factor in determining the cost of the premium as it might benefit you with certain percentage of discount.
This will automatically help you reduce your premium.
Coinsurance is the portion of the health plan that requires you to pay a percentage
of the coverage meaning that you will essentially be splitting the cost of your
healthcare with your insurance provider. For instance, if your health plan has an
80/20 co-insurance rate, your insurance plan pays for 80% of your eligible medical
expenses and you are responsible to cover the remaining 20% of the expenses.
Copay is available on many individual health insurance plans. This is the amount
you pay for a visit to the doctor or for a prescription. Insurance companies use
copayments to share health care costs.
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Other articles on Health Insurance
- Health Insurance Overview
- What is Health Insurance?
- Why health insurance?
- Types of Health Insurance
- What constitutes a Good Health Insurance Cover?
- Factors affecting Premium of health insurance
- Tips to find a good Health Insurance
- Saving on Health Insurance Premiums
- Health Insurance Glossary
- How to file a health insurance claim