When an insured individual get hospitalized due to accident or sickness, the health insurance he has purchased will help him in meeting the medical expenses with ease. This is because the insurance company will either reimburse the money he spends towards hospitalization and other expenses or the company will directly pay to the hospital, if he gets the treatment from a network hospital associated with the insurance company. Generally, the amount of coverage provided by the insurance company will vary as per the sum assured stated by the company at the time of purchasing the policy.
When purchasing a health insurance policy, it is recommended that people will have to consider different factors before choosing any policy. Here, the premium is an important factor to consider. Premium is the amount to be paid by the insured once in a year until the year for which coverage is purchased. As this is the money to be spent by the policy purchaser, it is recommended that the purchasers can opt for a policy with lesser premium. This premium money is fixed by the insurance companies after considering a number of factors and they are stated below:
Age is considered to be the important factor when deciding the insurance premium to be paid by a policy purchaser. The higher the age, more will be the premium. The reason for this is that when an individual gets older, the medical expenses tend to increase. Generally, young people would rarely need medical attention, but the same does not hold true in the case of elderly people.
The fitness of an individual also acts as the deciding factor when it comes to deciding on the health insurance premium. The reason is that when an individual is healthy, the chances of getting hospitalized are lesser. Similarly, if an individual has any genetic disorders, the premium would be higher or there are also chances that the disease might be excluded from the coverage.
The way of living of an individual will also determine the amount of premium charged by the insurance company. For instance, if the lifestyle of an individual is susceptible to health risk like if he has habits like smoking and alcohol, he will be charged higher premium as he is at greater risk of health issues.
The geographic location of an individual will also act as the deciding factor. For instance, people living in Tier I cities will have to pay higher premium as against those living in Tier II and Tier III cities. The reason is that medical expenses are generally higher in metro cities as against small ones.
Type of plan:
This is another deciding factor and here the family floater plans will have higher insurance premium as compared to individual coverage as the protection is extended to the entire family in the former case.
Amount of coverage:
The sum assured chosen by an individual will also determine the level of insurance premium he will have to pay. Of course, greater the sum assured higher will be the premium cost to be borne by the policyholder.
When the health insurance coverage offers additional benefits like cashless hospitalization, critical illness coverage, the amount of premium will be naturally higher.