A health insurance policy has become the need of the hour given the ever-increasing medical costs which pose a threat to your finances. Illnesses have become quite common and a common hospitalisation incurs a considerable amount of medical expenses. If there are treatments involved, the expenses easily amount to lakhs and bearing such expensive medical treatments proves to be financially draining. Moreover, medical inflation is also a steady trend which keeps on increasing the medical expenses year on year.
In this scenario when illnesses and injuries are becoming common and medical expenses are becoming unbearable, a health insurance policy is the only solution. The policy covers the medical expenses incurred if you are hospitalised and gives the much-needed financial relief from medical contingencies. Moreover, the premiums that you pay towards a health insurance policy are allowed as a deduction from your taxable income. You can reduce your taxable income by up to INR 1 lakh by investing in a health insurance plan for yourself and your parents and save taxes by INR 45,000 (assuming you are in the 30% tax bracket).
While health insurance plans cover your medical bills, you have to pay a premium to buy a health insurance policy. Do you know how to calculate health insurance premium?
How to calculate health insurance premium online?
Calculation of your health insurance premium can be done online in some simple steps. There are health insurance premium calculators which are available online which help you calculate the premium payable for a health insurance policy. These health insurance calculators are online tools which require coverage related details and based on these details the premiums are calculated.
To use the medical insurance premium calculator, here are the details which you need to provide –
- Your name and contact details
- Number of members being covered and their respective age
- The sum insured that you need
- Optional add-ons, if selected
- Policy tenure
- Applicable discounts
Once you fill in all these details, the medical insurance premium calculator calculates and displays the premium payable for the details that you had provided. You can even change the input details and the premium would change accordingly. For instance, you can increase or decrease the sum insured and/or the policy tenure or change the members to be covered and the premium would be updated.
Thus, health insurance premium calculators help you calculate the premium of a health insurance policy easily.
Factors that affect premiums of health insurance plans
Your health insurance premium depends on a lot of factors. These factors determine the amount that you pay for the health insurance policy and include the following –
- Your age
Health insurance premium depends on your age. Higher the age higher would be the premium payable and vice-versa. Thus, you need to mention your age so that the correct premium is calculated by the mediclaim policy premium calculator
- Members covered
Family floater health insurance plans allow you to buy a single policy for multiple family members like yourself, your spouse, dependent children and dependent parents. So, if you are buying a family floater plan, the premium would depend on the number of members covered under the policy. The more the members covered under the policy, the higher would be the premium payable and vice-versa.
- Age of insured members
Besides the name and relationship of the members being covered, their age also determines the health insurance premium payable. This is because the age of the members directly impacts the premium amount. The older the insured members are the higher would be their health risks and, consequently, higher would be the premiums payable.
Health insurance companies have classified Indian cities as Tier I, Tier II and Tier III cities because the medical expenses are different in different cities. Tier I cities consist of metropolitan cities where medical expenses are high. Tier II cities consist of populated cities which are developed but where medical expenses are not as high. Tier III cities are small Indian towns which have the lowest medical costs. Thus, premium depends on your location. Premium payable for Tier I cities would be the highest followed by Tier II and Tier III cities respectively.
- Medical condition
If you have an existing medical condition or complication, your health risk increases. This increased health risk increases the chances of claims. As such, health insurance premiums are high for individuals who have existing medical conditions compared to those who are relatively healthy
- Add-ons selected
Health plans allow optional coverage benefits which can be added to the policy for enhanced protection. These covers come at an additional premium and if you choose any add-on, its premium would be added to the aggregate premium thereby increasing it. As such, health plans with add-ons are more expensive than health plans without add-ons.
- Sum insured
The sum insured represents the maximum liability undertaken by the insurance company in case of a claim. The premium is directly proportionate to the sum insured you choose. If you opt for a high amount of sum insured, the premium would also be higher too.
- Discounts available
Health insurance plans allow different types of premium discounts. If you are eligible for the available discounts, your premiums would reduce.
- Claim history
This is relevant if you renew an existing health insurance policy. Under some health insurance plans the renewal premium is loaded if you make a claim on the policy in the previous year. Moreover, some companies allow a discount on the renewal premium if you don’t make a claim in the last year. So, depending on your claim history, the premium might be increased or decreased.
How to reduce the premium of a health insurance policy?
There are ways by which you can reduce the premium payable in your health insurance policy. These ways are as follows –
- Buy the policy young
You can buy the health plan at a younger age when the premiums would be low. As premiums depend on age, the younger you are, the lower would be the premium payable.
- Have a healthy lifestyle
When you lead a healthy lifestyle, you can keep medical illnesses at bay. When there are no existing medical conditions, the health insurance premiums are low.
- Choose a suitable sum insured
When buying a health plan, skimping on the sum insured is not wise. However, a high sum insured means high premiums too. So, always opt for an optimal sum insured and don’t go overboard. If affordability becomes an issue, you can opt for a top-up or a super top-up health insurance policy which would reduce the premium cost while at the same time increase the sum insured.
- Buy a separate plan for dependent parents
While a health plan might allow you coverage for your dependent parents, you should avoid adding them in your family floater policy. This is because the premium of the floater policy depends on the age of the eldest member. So, if you add your parents to the cover, the premium would be calculated considering their ages and would be high. Secondly, given their age, your parents might make frequent claims in the policy. This might lead to claim-based premium loading and you would also lose the benefit of no claim bonus. So, an independent health plan for your parents is better.
- Don’t make small claims
If you incur a claim and the amount is small, try and avoid making a claim in the policy. This would help you avoid claim-based loading if it is applicable in the policy and also preserve your no claim bonus.
- Opt for premium discounts
As mentioned earlier, health plans have different types of premium discounts. Opt for these discounts and reduce your health insurance premium. Some commonly available discounts include the following –
- Discount for covering two or more family members under the policy
- Discount for opting for a long term coverage duration
- Discount for choosing a voluntary co-payment
- Discount for being an existing customer of the insurance company
- Discount for buying the policy online
Advantages of health insurance premium calculators
Medial insurance premium calculators help you to calculate the premium of your health insurance policy before you actually invest in the plan. The benefits of these mediclaim policy premium calculators can be highlighted in the following points –
- Budgeting of the policy
When you know the exact amount of premium payable for the health insurance plan that you want to buy, you can factor in the premium in your budget. You can plan your budget accordingly and make a provision for the payment of premium so that the premium does not put a dent in your finances.
- Ensuring affordability
By calculating the premium beforehand, health insurance premium calculators enable you to ensure that the premiums are affordable. You know the cost of the policy before buying it and you can figure out whether the policy would be affordable for you or not.
- Allows dynamic changes
The mediclaim policy premium calculator is not rigid in nature. You can change the input details in the calculator and the premium changes accordingly. Thus, using the trial and error method in the health insurance premium calculator you can find the most suitable sum insured level which would be affordable and optimal for your coverage needs.
- Is free of cost
The best part about a health insurance calculator is that it is free of cost. You don’t have to pay any charges for using then calculator to calculate the premiums. You can use the medical insurance premium calculator multiple number of times too without incurring any cost. You just need a computer or Smartphone and an internet connection and the premium calculation can be done free of cost.
- Allows you to compare before buying
If you choose health insurance premium calculators shown online you can compare the premium quotes of the best health plans and then choose one.
Turtlemint has a tie-up with leading health insurance providers. It allows you to use its online health insurance premium calculator to find the premium charged by the leading health insurers at one go. You can enter in your coverage details once and get a list of premium quotes of different insurers. You can, then, compare the coverage offered vis-à-vis the premium charged by different plans and then choose the best health insurance plan which meets your needs.
So, the next time you buy a health insurance plan, use health insurance premium calculators and find out the premium rates beforehand. You can also use Turtlemint’s health insurance calculator to compare the premium quotes and buy the best health insurance plan.