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 What Factors Determine Your Health Insurance Premium?

In a world full of uncertainties, health insurance is a steady hand, giving you support in times of difficulties. It is a safety cushion for an individual and their loved ones. Since health is an unpredictable component in our lives, it always remains a variable. Health insurance plans from top insurers like Tata AIG are the constants that stabilise the mindset and financial planning.

However, health insurance affects your financial balance, too. The amount of premium, sum assured, policy tenure, renewability, death benefits, add-ons, etc., are the factors that affect the way you spend on alternative investments or other assets.

When you compare health insurance, you first look at the premium amount. It should be a consideration since the premium is a periodic payment in most cases.

We have established that health insurance premiums affect our finances, but now, let us dive into understanding what determines this amount. It will help you customise your policy and adjust your premium according to your convenience.

 Factors Determining Your Health Insurance Premium

  •  Gender and Age

One of the primary factors that affect the health insurance premium is your age and gender. Your age directly affects the premium since the older the policyholder, the more the risk of claiming the assured amount. Insurance companies like to remain on the profitable side while providing the best services.

Gender also affects the premium amount in health insurance plans. Women usually pay a lower amount of premium than men. There are statistics to back this decision of the companies. Since women’s life expectancy is approximately 2.5% higher than that of men, insurance companies find it less risky to cover for women.

  •  Genetic Disorders and Medical History

If the policyholder has any genetic disorder history, it is very evident that the individual already possesses it or will have it in the future. This results in your medical insurance premium amount rising.

Just like that, if the policyholder has a medical history, it leads to an increase in the premium amount of your health insurance. Pre-existing conditions are a guarantee that the policyholder will surely raise a claim sometime soon. Hence, the premium is usually high.

  •  Lifestyle Choices

Your lifestyle plays an important role in your health and steady life. Factors like smoking, drinking, tobacco consumption, etc., can prove to be extremely risky for your health. This, in turn, adds to your premium amount.

  •  Sum Assured and Add-ons

The maximum amount of money the insurance company offers you on raising a claim is the assured amount or sum assured of your insurance policy. It is a combination of the standard amount of the policy and various add-ons.

Add-ons or riders are additional coverage facilities provided as an option by your policy providers. If you put those, you are opting to be protected a little extra. These two things affect the premium amount in a way that it increases.

So, when you buy health insurance online, make sure you compare various policies in order to get the best offers and lesser premiums. This is possible with the use of online insurance premium calculators.

  •  Voluntary Deductibles

At the time of issuing a claim from the insurers, a person can pay out of their pocket, too. This is a choice and an option for the policyholder. You can pay out of your pocket if your financial condition allows you.

When your policy states the percent of these voluntary deductibles, the premium amount reduces proportionately. So, we can conclude that voluntary deductibles definitely influence the premium amount.

  •  Type of Plan

There are various types of insurance plans available in the insurance market. You have various options like standard individual health insurance, family health insurance, senior citizen health insurance, maternity health insurance, pre-existing medical condition health insurance, etc.

The premium will fluctuate across these types. Hence, the type of insurance policy you choose is going to affect the premium amount of your policy.

  •  Policy Tenure

The policy tenure is one of the factors that influence the premium amount. If your policy tenure is longer, the premium amount will be lower, and when the policy tenure is short, the premium is higher. So, we can say that the policy tenure also determines the policy premium.

  •  Other Factors
    • Occupation type
    • Family Size
    • BMI: Body Mass Index
    • Geographical location
    • Co-payment or co-insurance
    • Pre-existing medical illness


The various factors that make a policy and define the policyholder are the very factors that influence the health policy premium. It is not a difficult concept to grasp since these factors are very self-explanatory.

You must understand what effect these factors have on the premium so that you can customise the policy according to your financial planning and capability of paying the premium amount. Buy health insurance wisely and make an informed decision.

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