The latest official data shows the number of people covered by health insurance in India could be far fewer than estimated. Only 21.62 crore people, or 17 percent of the total population, were covered by health insurance at the end of March 2014, according to an article published in The Hindu in December 2014. Most often, people lay emphasis on life insurance in India and sometimes even think that it would cover for healthcare costs as well.
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Factors that Determine the Premium
Health insurance is one product that will help you save from financial crises in case of grave medical emergencies. But if not thought out carefully, it could well become a financial burden over time. You must budget your health insurance in order to save yourself from paying higher premiums. Insurance companies/banks sit down and after thorough calculations, determine the premium for a policy. Most banks have a base premium rate but the actual premium one pays might differ for same policy because of a host of factors that differ from individual to individual. Here are few factors that are usually considered to determine the amount of premium you pay:
1. Age – Age of the insured is an important factor for determining the premium. Senior citizens may have to pay very high premiums, as compared to younger individuals. Premiums may also be higher for individuals above 45, since they are more likely to fall ill as they age. Also, if you buy a policy at 30, its premium increases as you move from one age bracket to another. Likewise, you may have to pay higher premiums for the same policy after you cross 40.
2. Pre-existing Illnesses – People with pre-existing illnesses are usually charged a higher premium. Such illnesses might also not be covered by the policy for the first few years.
3. Sum Assured – The higher the sum assured, the higher the premium. Determine the optimum amount of cover you need, current financial status and future financial goals before deciding on the sum assured.
4. Type of Policy – Family floater policies tend to have higher premiums than individual policies, since they offer cover for many people under the same plan.
5. Personal health – Personal health of the insured is an important factor that determines the premium. This may include lifestyle habits, such as smoking. Premiums are generally higher for smokers.
You can also seek advice from a financial planner in order to budget your health insurance plan and get the most suitable deal possible. Also consider buying health insurance online, since online plans tend to be cheaper than their offline counterparts.