Health Insurance Premiums - Everything You Need to Know

What is a Health Insurance Premium?

Health insurance premium refers to the sum of money you pay to keep your health insurance active. You can pay it every month or simply once a year according to your convenience. If you fail to pay a premium on time, your policy may lapse, or it may not be renewed.

Most insurance companies give you extra time, called a grace period, to make the payment if you miss the due date. But if you don’t pay within this period, your health insurance policy might be canceled.

How Health Insurance Premiums Work

Health insurance premiums are the amount of money, which is usually paid each month or year to maintain your insurance. If you stop paying, your coverage will end.

But premiums are not the only costs you’ll have for medical care. Besides the monthly premium, there may be some out-of-pocket costs, such as:.

• 1. Deductibles : The amount you must pay each year for covered care before your insurance starts to pay.
• 2. Copays : A fixed amount you pay for doctor visits, prescriptions, or other healthcare services. Your insurance will cover the rest.
• 3. Coinsurance : A percentage of the medical bill you still have to pay after reaching your deductible. Your insurance covers the rest.

Factors that Affect the Health Insurance Premium

Health insurance premiums can be different for everyone. Some factors affecting how much you pay for health insurance are discussed below:

• 1. Type of Coverage : Different health insurance plans offer different types of coverage. The higher your coverage is, the less affordable your premium will be.
• 2. Add-ons Purchased : You can add extra coverage to your health insurance plan to get additional benefits. The price of an add-on is an extra fee which increases your premium.
• 3. Sum Insured : This is the maximum amount your insurance will pay for your medical expenses. A higher sum insured means a higher premium. For instance, a plan with a coverage of ?50 lakh will attract a higher premium than a plan with a coverage of ?5 lakh.
• 4. Age : Your age affects your premium. As you get older, you may have to pay a "higher premium" since older individuals are more prone to medical care.
• 5. Medical History : If you have pre-existing conditions such as diabetes or hypertension, your premium would be more expensive, as you are tagged as having a higher risk of illness.
• 6. Lifestyle Habits : Some behaviors, such as smoking or drinking alcohol, can result in increased premiums, because those behaviors may lead to worsened health conditions.
• 3. Co-payment : Co-payment is the fee that you agree to pay for part of the medical bill when submitting a claim. When you select a larger copayment (e.g., 10%,) your premium will be lesser, but you have to pay more when you make a claim.

How to Reduce Your Health Insurance Premium?

• 1. Make a Smart Purchase : When buying health insurance, choose a plan that fits your needs without paying for unnecessary extras. Compare different plans and select the one with the best coverage at the best price.
• 2. Choose Add-ons Wisely : Add-ons are extra covers that can increase your premium. Only buy the add-ons you truly need to avoid paying for extra features that you won't use.
• 3. Avail Discounts and Offers : Many insurance companies offer discounts or special deals. Look for these offers, especially if you're renewing your plan or purchasing a policy for the first time, as they can help lower your premium.
• 4. No Claim Bonus (NCB) : If you don’t make any claims during the year, some insurance companies offer a No Claim Bonus, which can increase your coverage at no extra cost or reduce your premium.
• 5. Buy Plan at Early Age : If you buy health insurance when you are younger, your premium is usually lower. Insurance companies charge higher premiums as you get older, so it's a good idea to buy a plan as early as possible.

Conclusion

Health insurance is an essential part of managing medical costs, especially when unexpected emergencies arise. The premium you pay ensures that you have access to quality healthcare whenever you need it. Understanding how premiums work helps you make informed decisions about your health coverage. So if you want to compare different insurance companies' premiums in one place, visit Square Insurance.