How are Health Insurance Premiums Calculated ?

Understanding how Health Insurance Premiums are Calculated is essential for policyholders seeking comprehensive coverage. This guide delves into the intricacies of premium determination, shedding light on factors that influence the cost. So what are some factors that affect term health insurance premiums? Read more about Health insurance Premiums here.

how are group health insurance premiums calculated

1. Type of Health Insurance Policy 

Health insurance policies that cover chronic conditions will have higher premiums than those that are able to cover only more acute diseases or mild medical conditions. Additionally, an individual health insurance policy will cost less than a medical insurance plan that covers more than a single person. In other words, more dependants mean higher premiums for your policy. 

2. Age 

As a matter of fact, the younger you are, the less expensive your health insurance premiums will be.  

This is simply due to a risk calculation of health insurance. The older you are, the higher chance that you are getting ill and likely to file more claims which pose a higher risk for the health insurer. Therefore, your health insurance premiums go up in this case. 

3. Gender 

As a golden rule, women pay less for health insurance than men because women typically live longer on average than men. This is why ladies are perceived as a lower health insurance risk than men by health insurance companies. Apart from the healthspan, men tend to have more hazardous jobs and higher-risk hobbies such as drinking alcohol and taking drugs or even driving beyond speed limits. It is true that not every gent has a construction-related job and has an alcoholic issue. However, health insurance premiums are calculated based on averages, not individually.  

4. Medical history (Pre-existing Medical Conditions) 

The healthier you are, the lower your premiums will be. A health insurance policy with the requirement of a medical exam is typically less expensive than the simplified one where no medical exam is needed because in this case the health insurance provider is taking an unidentified risk so premiums are higher accordingly. Providing accurate medical history during the application process is vital to ensure transparency in premium calculation. 

You are advised to be open and honest about your medical history by declaring all of your diagnosis, surgery and prescription. If the health insurance company found out that you did not do so, your medical claim would not get approved.   

5. Drinking and smoking status 

The more heavily you drink or smoke, the higher health insurance premiums will be. This is simply because heavy consumption of alcohol or heavy smoking lead to a higher chance of developing various medical conditions causing a higher risk for the health insurance companies and hence a higher premium for you. 

6. Location 

If you live in a country with a high risk that involves war, terrorism or natural disaster or tropical diseases, your health insurance premiums will become higher in this regard. Simply put, Regions with higher healthcare costs may result in higher premiums. 

7. Payment schedule 

The fewer payments that you are able to make, the lower your health insurance premium will be. If possible, select the option of paying premiums on an annual basis or a quarterly basis to save on your health insurance cost. Deductibles and Co-payments influence Health Insurance Premiums. Policies with lower deductibles and co-payments generally come with higher premiums. Delve into the balance between upfront costs and ongoing premium expenses. Assessing your financial capabilities and healthcare needs can guide you toward the deductible and co-payment structures that suit you best.

Our advice 

Always make sure you examine financial and medical conditions whether they are in line with the level of coverage on your current health insurance policy, otherwise switch it to the one that perfectly matches your specific health coverage requirements and those of your loved ones. After all, it is never too late to plan for saving on your health insurance premium you deserve.

At i-Brokers, we pride ourselves on being transparent with our premiums. This is reflected in our health insurance premium comparison tool which allows you to receive and compare insurance quotes in seconds! 82% of customers save money on premiums when comparing insurance with i-Brokers. Can you afford not to? Learn more here.

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