How is Your Health Insurance Premium Determined?

Health insurance premium is the amount that you pay to the insurance provider to get health insurance coverage. If you have bought a one-year health insurance plan, you will have to pay the premium annually. If you have purchased a two or three-year plan, you will have to pay the premium altogether for the selected policy duration.

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    You can find various health insurance quotes from different insurance companies and compare the cost of the premium. The cost of the premium is determined by health insurance companies after assessing your lifestyle, medical history, pre-existing illnesses, and other similar factors.

    Most of the health insurance providers have their own set parameters and based on them they fix the quotation price. After conducting the research, compiling the historical data and analyzing your customer profile they decide to accept or reject your health insurance application. After assessing the risk factors, the health insurer will send the final quotation. It is important to know that every insurer uses its own assumptions and has its own set of standards while calculating the health insurance premium. 

    You can also calculate premium online using an online health insurance calculator.

    Medical inflation is on a rise, and as per the reports, this figure is going to increase double fold this year. Even if the premium cost is skyrocketing, a medical insurance policy is the need of the hour to get the best possible medical treatment in India or abroad.

    There are different health insurance plans- family floater policy, individual health insurance policy, and critical illness policy and the cost of their premium also differs.

    Below are some of the factors that are taken into consideration when calculating premium of the health insurance plans:

    1. Pre-existing Diseases

    Anyone with a pre-existing illness is more likely to file a claim. Though most of the health insurance plans cover pre-existing illnesses after 2 to 4 years of the policy, the certainty of filing a claim is always more. For this reason, health insurers consider it a costly affair.

    Therefore, for applicants with blood pressure, thyroid, and diabetes the chances of rejection are higher. That is why it is advisable to buy health insurance at a young age.

    2. Type of Health Insurance Policy

    Your health insurance premium is based on the type of health insurance plan that you buy. If you are buying a critical illness policy then its premium will be on a higher side. And if you buy an individual plan its premium will vary from a family floater plan.

    To know the difference you can calculate the premium online with the help of a health insurance calculator.

    3. Age and Gender

    With the age of the applicant, the medical insurance premium cost also increases. With age health issues also increase. For this reason, such applicants are charged a higher premium because there is a higher probability of them filing a claim due to a health issue.

    Even women are charged a lesser premium. And people above the age of 40 years are charged with higher premium costs as they are more likely to file a claim due to any lifestyle disease or any critical illness.

    4. Family Medical History

    The insurer would ask for the medical history of your family and then decide the premium cost. It is required to check if there are certain diseases that run in your family and if you are vulnerable to such health risks. It is also one of the major factors that an insurer will consider.

    Most insurers require the applicants (of a certain age-group) to undergo a pre-medical screening and some make it mandatory for all the applicants irrespective of the age group.

    For instance, if anyone in your family has thyroid or diabetes then they become vulnerable to various other health problems. Therefore, the health insurance premium for them will be more than someone with a clean medical history.  

    5. Lifestyle

    If you smoke regularly or consume alcohol on a daily basis your insurer can deny you a health insurance cover. However, there are some medical insurance providers that would cover such risk but the same would be compensated with a higher premium cost.

    The ill-effects of alcohol consumption and tobacco consumption last longer. For this reason, people who give up alcohol, are also vulnerable to consequent diseases and are more likely to file a health claim. Insures charge them higher premium or deny coverage as they are more likely to develop critical illnesses such as cancer, kidney failure etc.

    Why is It Better to Calculate Premium with A Health Insurance Premium Calculator?

    • It is easier to compare and evaluate different health insurance plans in a matter of no time
    • It is both cost-effective and convenient to select the most suitable plan
    • It gives you a fair idea of the health insurance premium for different policies
    • You can select the most affordable and ideal policy
    • It is the most economical and time-saving mode of making an informed purchase
    • It saves you from the hassle of meeting agents. You can decide policy in a fair manner without feeling pressurized

    Usually, all the health insurance providers have an online health insurance calculator on their site. You can use it to know the premium for different plans and sum assured options.


    The health insurance premium is a fixed cost that you need to pay to avail the benefits of a mediclaim policy.  Apart from the coverage type, sum assured amount and other features, your lifestyle also matters. You must have realized that if you purchase a policy at an early age you can get a better deal and secure your future in the right manner.

    Written By: PolicyBazaar - Updated: 23 July 2021
    Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

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