What Are The Factors Affecting Health Insurance Premium?
By Okbima 16 May 2023 44

What Are The Factors Affecting Health Insurance Premium?


A massive increase in consumers purchasing health insurance policies has occurred in recent years, primarily due to the growing expense of medical care. In addition, many are going above and beyond purchasing individual insurance to guarantee their family has a safety net in the event of a catastrophe. 

You receive tax advantages in addition to being covered during challenging times by health insurance. Insurance companies often thoroughly evaluate your health profile before accepting your insurance application. The health insurance premium costs are set based on their review.


Health Insurance Premium-Affecting Variables

Each insurance company follows rules to determine how much the health insurance premium will cost. In calculating the medical insurance premium, the following factors are taken into account:


It is among the key elements that determine the cost of the premium. Insurance providers typically adhere to the maxim that the older a customer is, the higher the premium. When compared to younger people, older folks have a more significant chance of being sick. As a result, if you purchase health insurance when you are young, you will receive more excellent coverage and lower premiums.

Health History In The Past

In calculating the premium, your prior medical history is essential. Your health insurance premium costs will be higher if you've got a record of illness or an underlying condition. Nonetheless, your cost will be lower if you haven't had any illnesses and a healthy life.


The premium costs are influenced by your line of employment and the level of danger you face on the job. Your premiums will be lower if, for example, you are employed by a school, but it will be greater if you work in a factory or construction site where there is a significant danger of injury.

Term Of The Policy

A significant factor is the policy's duration. The health insurance premium costs will be lower if you select a longer-term policy. In this case, insurance with a shorter period may not have the same coverage.

The Measure Of Body Mass (BMI)

If you, the client, have a high BMI, premium prices will be increased. In addition, a high BMI increases the chance of developing major illnesses, including cancer, heart disease, type 2 diabetes, respiratory issues, and high blood pressure.

Avid Smoking Habit

According to a publication in the medical journal Lancet, one study found that 11.2% of smokers worldwide are in India. Smoking raises health risks, and as a result, insurance firms charge higher health insurance premium costs for smokers since they are seen as high-risk insurance purchasers. Comparatively speaking to non-smokers, smokers pay higher rates.

Area Of The World

The price of your insurance premium is based on where you stay. Because of the poor availability of healthy food alternatives, the local environment, and health concerns, premium rates are higher in some areas.

Chosen Plan

The premium amount is determined by the kind of health insurance you select. An individual policy's premium is higher than corporate health insurance coverage. In addition, you will pay a higher premium if you have added-on coverage. Compared to family floater insurance, corporate or individual insurance has a low premium rate. The stipulations of each company's policy are unique, once again.

Presence Of Coinsurance

If you choose coinsurance, your premium will be lower when buying health insurance coverage. In addition, as part of coinsurance, you are responsible for a certain amount of each claim, with the remaining amount covered by the insurance provider. This action drastically decreases health insurance premium costs.

Sum Assured

Your choice of the sum insured will also impact your health insurance price. As the amount of insurance is the highest limit you may reimburse your provider for medical costs, a smaller SI might lead to a reduced premium and, conversely, a bigger SI.

But, you will be responsible for covering the difference if the total cost of your medical expenditures exceeds your SI allotment. Therefore, to avoid boosting what you have in the event of need, you must carefully pick your SI.

Norms And Way Of Life

It will also affect your premium if you have bad routines such as smoking, tobacco chewing, or snuff. Smokers' health insurance premium costs will be greater than non-smokers' due to these behaviors' increased risk of lung infections, cancer, and other serious ailments. Compared to non-smokers, this rise for smokers may be approximately twice as high.

Conditions Already Present

Diabetes, hypertension, or asthma are examples of pre-existing medical disorders that have a long-term impact on health and are likely to result in greater hospital costs and costly healthcare expenditures. 

Compared to healthy individuals within the same age bracket, they will thus be required to pay a greater premium. According to your pre-existing ailment and its severity, as determined by a doctor, your health insurance premium costs will increase proportionally.

Extra Protection In The Form Of Add-Ons

You can choose extra coverages (add-ons or riders) to your current health insurance policy to increase its advantages for a fee. However, you must pay an extra premium if you add add-on covers to your health insurance plan, such as maternity, critical illness, personal accident, or AYUSH therapy.

Yet, in accordance with the IRDAI, the premium across all add-ons purchased under a particular health insurance plan cannot be greater than 30% of the initial premium sum.


When determining a person's weight based on BMI, insurance companies view overweight people as having a higher risk of developing diseases like diabetes or hypertension. They will also pay higher health insurance premium costs because there may be a more significant probability that they may later file health insurance claims.


Is It A Given That A Smaller Premium Payment Indicates That The Insurance Plan Would Provide Insufficient Coverage?

No, as the cost of health insurance coverage will vary according to the insurance provider and the variables mentioned above, such as age, SI, etc. One firm may offer coverage at lower health insurance premium costs than another.


Why Is Health Insurance Such A Necessity?

Those who believe they can live without health insurance should continue reading. Lifestyle illnesses are a result of factors such as pollution, sedentary lifestyles, stress, poor eating patterns, and device addictions. Health insurance coverage is necessary since lifestyle disorders, including obesity, diabetes, heart disease, and respiratory issues, impact children and adults.

A health insurance plan is required to cover the medical demands of your elderly parents susceptible to disease or your dependant children. Since new illnesses have emerged recently, we have observed a significant increase in the expense of diagnosis and therapy. To avoid the financial burden of expensive medical care, it is crucial to have healthcare coverage that offers both quality care and does so for a relatively low fee.

Yes, the list might go on forever. Still, the critical thing to remember is that medical insurance is necessary in today's world, and families need to make investments that will help protect them from high medical costs.


Benefits Of Buying A Health Insurance Plan

Our health plans offer several significant advantages, including

No-Cash Transactions

Cashless health insurance is a feature of our health plans that enables you to access a variety of network hospitals across India for medical care.

Spending before and after hospitalization

Our health insurance covers the cost of care both before and following hospitalization.

Exams for Illnesses

Our health insurance policies cover regular or recurring physical exams, and the best insurance companies provide their customer's free physicals.

Transportation Charges

Our health insurance coverage covers the transportation expense for an insured person to get to the hospital.

Advantage of Tax Saving

According to the 80D Section of the Income Tax Act, you can take advantage of tax benefits with our health plans by paying health insurance premium costs for health insurance policies.


Why Is Using An Aggregator For Health Insurance Premiums Like Okbima Better For Premium Calculation?

Here are some benefits of using Okbima:

  1. Different health insurance policies are quicker and simpler to examine and assess.
  2. Selecting the best appropriate strategy is both practical and economical.
  3. It accurately represents the cost of various health insurance packages.
  4. The most suitable and economical coverage is yours to choose from.


Thus, you know that the premium for health insurance is the sum you spend on the insurance carrier to obtain health. Therefore, you would need to make the yearly premium payment if you purchased an annual health coverage plan. 

If you choose a two- or three-year plan, you must cover the health insurance premium costs in full for the chosen policy period. The essay also discusses all the additional elements that affect premium prices.

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