The health sector in India has been growing rapidly, and so are the health care services. No matter how strong you financially are, the immense cost of critical disease treatments and medications can make your life more stressful. The impact of higher inflation has made a huge impact on the health insurance services and now, most of the health policies are getting expensive that directly affects your premium.
Thus, whenever you are opting for a health insurance policy, calculate the premiums by using several health insurance premium calculators available online, and make the right decision.
What is Health Insurance Premium?
A health insurance premium is an amount you pay to an insurance company for availing the benefits of a health insurance plan. The premium varies from company to company and policy to policy. The more you pay for the coverage, the more you are likely to get benefits on the health insurance policy. To keep your health cover fully active you have to pay your premiums on time so that you can enjoy the benefits such as hospitalization expenses, routine check-up, critical illness and so on.
For instance, after all the research, you finally end up choosing a particular plan that costs 2000 per month. That 2000 monthly fee would be your health insurance premium. In order for all of your health care benefits to stay active, the health coverage premium must be paid before the due date or your policy will expire.
Importance of Health Insurance Premium Calculator:
Calculating premiums for your health insurance can be a complex task but is very essential to decide your budget or financial planning for the year. Most of the people choose a random policy with whatever amount needs to be paid. However, many of them fail to fulfill the premiums on time, due to high premium rates and lack of planning. Hence, to get aware of the policy payments in advance, it is better to quickly calculate your health insurance premiums.
Another important reason to calculate health insurance premium is to make your bonus easier as you are going to have an idea about how much of your monthly income should be kept aside to pay the premium on time. Also, you can decide which policy is suitable with a manageable premium expense, you can easily pay. This means that you can reach to the conclusion of the sum assured with the premium that goes perfectly with your lifestyle.
While inspecting various health insurance plans, it may get extremely frustrating to consider a number of parameters that help you determine the right plan for you and your family. Therefore, such online premium calculators can help you, making a quick and right decision.
Here is How You Can Calculate Your Health Insurance Premium:
When it comes to calculating premium on your health insurance, there are a number of factors available, which can help in deciding the premium. However, each company has its own calculation method, but most of them work on the same guidelines. Here are the general factors for calculating insurance premium:
Personal History: You may not have to get a medical checkup done while getting a health insurance policy, but the companies do check the medical history of the person and his family including habits like any type of addiction and age. These aspects help them decide the amount that the insured has to pay. The better reports your provide, the lesser your premium will be.
Band Rating: This is a base rate charged for a specific set of characteristics, such as age, location, family size, and source of income. For instance, a person between 25 to 35 years old will have to pay a lesser premium as compared to the older ones.
Modified Community Rating: This includes a number of factors for premium calculation of a health insurance policy. From the geographic location, industrial development to activities or lifestyle of a place you live, everything comes under this category.
Savings: Insurance companies invest the premiums in the public sector, and strictly avoid private sector due to excessive risk. Each of the investments follows the guidelines of the IRDA, to avoid any compliance issues in the future.
Marketing & Administration Expenses: When it comes to marketing and services related expenses, the number is huge, which can easily be recovered by the premiums paid by policyholders. While designing medical health policy, such expenses are kept in mind including commission, marketing, brokerage, advertisement, and other additional expenses.
Rate of mortality:
When a company has liabilities, and they are required to pay the sum assured to the policyholder or his family members, in any case of emergency hospitalization the rate is calculated as the mortality rate.
In the morality expense, the company has to bear the expense of an eventuality to a policyholder. The expenses can vary from person to person due to the age difference as the premium for older people are high. Older people are more likely to get ill, and hospitalized due to major age-related health issues.
Medical Underwriting: To determine the balance between individual and group health insurance policies, insurance products are underwritten by the companies. In this underwriting process, risks and possibilities are analyzed with the solutions. Based on the analysis, different policies are designed with different eligibility criteria so that the policy can be denied, to avoid losses in the future.
Tax Benefits & Health Insurance Premium:
Under section 80D, the insurer will be availed with the tax benefits if the premium contribution is done from an income, which is counted under the tax, plays a crucial role in the tax benefits for the customer. From individual insurance payment to family members’ health expenses, the premium paid would not be entitled to tax exception.
By calculating your health insurance premium you can avail the most suited health insurance plan with easy premium options. There are hundreds of options available for calculating premium or you can choose the official website of the insurance company.