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10 key Factors That Affect Your Health Insurance Premium

Written by - Akshatha Sajumon

January 24, 2022 5 minutes

One of the ugliest outcomes that this pandemic has shown us is the lack of proper health care infrastructure in our country. The gaps in the health care system and the high costs resulted in many people not getting timely medical attention to cure themselves or their family members. This has further emphasized the need for a proper health insurance plan for every individual and their family members. 

Given below is the meaning of health insurance and the factors that affect the premium of such health care plans. 

What is health insurance?

Health insurance has become an essential investment along with term insurance or other investment options like mutual funds or fixed deposits from the point of view of tax saving and building a sound portfolio and safeguarding the individuals against any unforeseen medical emergencies. 

The simplest explanation of health insurance is insurance to cover an individual’s medical expenses and his/her eligible family members. The expenses that can be included in any health insurance plan are the pre and post-hospitalization expenses, cost of medicines, cost of treatment, hospitalization cost, doctor fees, etc.  

What are the factors affecting health insurance premiums?

There are multiple health insurance providers that offer tailor-made health insurance plans that meet the specific needs of individuals. Individuals have to pay a premium for such plans at regular intervals dispensing on the agreement between the insurer and the insured person. The amount of premium for health insurance plans depends on many factors and varies based on the customer profile as well as the insurer’s guidelines. 

Some of the common factors affecting the premium on health insurance are highlighted below.  

Existing medical history – pre-existing conditions or illnesses

A person having a poor medical history will have to pay a higher premium for the health insurance cover. This is due to the higher risk involved in insuring such persons and the probability of payout being higher. 

Type of health cover

The type of health cover is also an important factor affecting the health insurance premium. If an individual is covered under a group health insurance plan, the premium amount will be lower compared to an individual health insurance plan or a family floater plan. Also, if there are many add ons or riders added to the basic health insurance plan the premium to be paid will be increased. 

Age of the applicant

Age is one of the most crucial factors affecting the premium payment. The general rule in any insurance cover is ‘lower the age, lower the premium amount’. As the age of a person increases the chances of multiple health issues also increase. Hence the premium amount to be paid for a person over the age of 40 will be considerably higher than a person in their 20s. 

Occupation or profession of the applicant

The occupation or the profession of the applicant is also a contributing factor in determining the premium amount. If a person is involved in a high-risk profession, the amount of premium to be paid will be higher.  

Current habits of the applicant

Smoking is a terrible habit and can cost you more even in health insurance premiums. Smoking causes many health issues and hence smokers are considered to be high risk individuals as compared to non-smokers. 

Body Mass Index (BMI)

Body mass index is often used to measure a person’s health. A person having a higher body mass index is viewed to be a high-risk candidate for various diseases like diabetes, heart ailments, blood pressure, etc. hence the premium for a person with a higher BMI will be higher than a person with a lower BMI.

Gender of the applicant

The gender of the applicant also is often a factor considered by insurers while determining the premium amount. Women are generally presumed to be susceptible to more chronic ailments as compared to males. This leads to a higher premium to be paid for women applicants as compared to male applicants. 

Marital status of the applicant

In some cases, the marital status of the applicant can also be considered in the premium calculator. If the applicant is married, insurers tend to lower the premium as compared to single individuals. 

Location of the applicant

Many insurers base the amount of premium to be paid on the location of the applicant. Certain locations demand higher premiums based on factors like climatic conditions, lesser access to nutritious food, better amenities, etc.  

Past health insurance

If a person is a first-time buyer of health insurance, then the insurer is likely to charge more premium as compared to a person already having health insurance. 


Having a health insurance plan has become a necessity rather than a leisure investment option. It safeguards individuals from any unexpected medical scenario or a case of excessive medical expenditure. 


1. What is the basic difference between medical insurance and health insurance?
A. Medical insurance provides coverage only for hospitalization, pre-existing medical conditions, or situations. Health insurance on the other hand provides comprehensive coverage for pre and post-hospitalization as well as ambulance or doctor charges, etc. 

2. Can health insurance be bought online?
A. Yes. Health insurance can be easily bought online by submitting basic KYC documents and making online premium payments. However, like every insurance, health insurance also has a waiting period after which the insurance cover takes effect. This waiting period is different for every insurer as per their guidelines as well as the type of cover. 

3. Does health insurance provide cashless treatment to insured persons?
A. Yes. Cashless treatment is part of many health insurance plans provided by the majority of insurers. This facility allows the insured persons to get immediate hospitalization without the need to pay any cash upfront at the time of admission.

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