Learn the factors that reduce Health Insurance Premiums

Health care sector is leading the race of inflation by almost double the rate of other sectors. The cost of health care has almost tripled in the past decade. With an inflation rate of almost 20%, access to health care sector is becoming a very costly affair, especially in a country like India, where a million people die every year due to inadequate medical facility and 700 million people have no access to specialist care.

With such conditions in the health care sector, health insurance policy has become compulsory for everyone. But still many people drop the idea of buying a health insurance policy due to its price and even if someone goes for buying a health insurance policy, the amount of cover chosen is low because of price concerns. We want our every single penny spent to return more than its value and that’s why we try to buy every product at the lowest with maximum returns. This can happen to health insurance policy also. There are many factors which can help you to reduce premium rates. By knowing these factors, you can easily reduce the price of your policy without compromising its benefits.

Following are the factors which can be used to reduce the health insurance premiums.

Age

Age plays a major role in your premium rates. Younger the buyer, lower will be the premium rates. Young people have less chance of having any disease and they require less medical attention in comparison to people with advanced age, that’s why companies offer low rate of premium for young buyers. Always try to buy health insurance as early as possible because it will allow you to have low premium rates and have cover for longer duration also.

Health condition

A medical check-up of the buyer is required before buying a health insurance policy. Insurance companies ask for medical check-up to know the risk associated with the life of the buyer. A healthy person will have less chances of making claims in comparison to an unhealthy person and that’s why companies offer low rate of premium for healthy people. If you are diagnosed with any disease after the medical checkup, your premium rates will increase according to that. So it is better to stay healthy and enjoy low rates of premiums.

Co pay

Under a Co-pay clause, a certain percentage of the claim amount is paid by the insured person. For example, if your medical expense is Rs.10, 000 and your Co-pay clause is 20-80, then Rs.2000 will be paid by you and the rest of the amount (Rs.8, 000) will be paid by the insurer. Some health insurance plans come with compulsory Co-pay clause, but if there is an option of voluntary Co-pay, then you can get great discount on your premium rates. Higher the percentage of co-pay from your side, lower will be the premium rates. It is beneficial for people who are young and healthy.

No-claim Bonus

No-claim bonus is given to the insured person if he makes no claim for a certain period of time(varies from company to company but is generally 1 years). If you are healthy, then your chances of making a claim are low and you can also enjoy no claim bonus in the form of reduced premium rates or increased sum assured (without any increase in the premium rates). Always check that your policy is offering a no claim bonus or not.

Deductible

Deductible is the amount which you pay for health care service before your insurer starts to pay. For example, if your deductible is Rs.5, 000, then after getting the insurance, you will pay all the expenses of your health care till the total amount reaches Rs.5, 000. In voluntary deductible, you get an option to decide your deductible amount. If you select high deductible, then premium rates will be low for you.

Family floater plan

Family floater plan gives you the opportunity to cover your whole family (Spouse, Kids and Parents) under one plan. The coverage amount is divided into the family members in a family floater plan. The rate of premium is usually lower in family floater plan in comparison to individual plan. But the rate of premium in a family floater plan is decided upon the eldest family member. So if your parents are at a very advanced age and suffering with diseases, then it is better to go get a separate plan for them.

Online purchase

Online health insurance plans will always have a low rate of premiums in comparison to offline health insurance plans. While buying health insurance policy online, there is no involvement of an agent and thus there is no commission. The cost saved on commission is passed to the insured person in the form of a low rate of premium rates.

Top-up plan

A top plan covers the hospitalization cost, but only after reaching a threshold limit. It provides additional coverage for people who already have a health insurance plan. For example, if you have a plan of Rs.4 lakh with a threshold limit of Rs.1 lakh, then Rs.1 lakh of hospitalization cost has to be paid by the insurer and the rest will be paid by the insurer. It allows you to have additional coverage at a low rate of premium.

Smoking habit

Smoking is bad for your health and for your premium rates also. Health Insurance companies know that smokers have a higher mortality rate than a non-smoker and that’s why they charge high rate of premium for smokers. A smoker can be charged almost double the rate of premium in comparison to a non-smoker. It is better to avoid life-threatening addictions like smoking and enjoy low rates of premiums.

Buying a health insurance policy can be a lot cheaper than what you think. You just need to know the factors which affect the premium rate of a health insurance policy and you will be able to fit health insurance policy in a tight budget also. Understand the policy terms and condition and make your health insurance policy an affordable deal.

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