How To Use A Health Insurance Premium Calculator To Choose The Best Policy For You

Health Insurance

A health insurance premium calculator is a convenient and simple online calculator that lets you calculate your insurance premiums. This helps you to choose a cost-effective health insurance policy and lets you compare the payable premium, applicable for different insurance policy providers so that you can make an informed decision. 

This article provides a detailed overview of why you need a health insurance premium calculator, its benefits, how to use it and how to reduce the premium amount. Read on!

Why do you need a Health Insurance Calculator?

Technological advancements have skyrocketed medical expenses. This is why it is recommended to purchase health insurance. But before you do so, you must calculate the premium amount to check your affordability so that you do not default on premium payments. A health insurance calculator will help you know the premium amount of particular insurance beforehand which will help you manage your finances accordingly. 

How to Use a Health Insurance Premium Calculator?

A medical insurance premium calculator is quite easy to use. Just follow these steps to calculate your insurance premium effectively:

Step 1: Open an online health insurance premium calculator.

Step 2: Select policyholder type from available options such as – individual, couple, and family. 

Step 3: Enter the age of the applicant/all members.

Step 4: Enter location and pin code.

Step 5: Select coverage value and click on the calculate button.

Alternatively, you may visit the official website of insurance policy providers to check the particulars of different insurance plans or simply to raise a quote. Here’s an example of how you can check insurance premiums in less than 5 minutes through the Navi app: 

1. Download the Navi Health Insurance app.
2. Enter the details for the total sum insured, years covered and the number of family members you wish to insure. 
3. Answer all additional questions to receive premium quotations. In case of pre-existing conditions, answer a few more additional questions.  

Information Required for Calculation of Health Insurance Premium

The insurer or the insurance provider will need the following details to calculate the medical insurance premium:

• Past medical records
• Age and gender of the individual to be insured
• Type of plan
• Add-ons
• Tenure of the policy
• The lifestyle of the insured
• No-claim bonus 

How do Health Insurance Premium Calculators Work?

The premiums of a Mediclaim vary from one policyholder to another. A Mediclaim premium calculator will let you know the premiums of your new or renewed policy based on the details provided by the individual.

The details one has to provide are as given below and might vary from one insurer to another:

• Name of the insured
• Contact details
• Date of birth
• Gender
• Number of insured to be covered under the policy
• Current city
• Add Ons
• Policy term
• Coverage amount

Benefits of Using Health Insurance Premium Calculator

Premiums vary from plan to plan and policy provider to policy provider. Using a  will help you get better clarity on your premiums.  

Here are some of the benefits of using a health insurance premium calculator:

• A health insurance premium calculator lets you calculate the cost of their premiums in advance.
• Easy to use with a quick turnaround time to check premiums in a health insurance plan calculator.
• Let you compare premiums so that you can make an informed decision.
• Helps avoid complex and tedious calculations on paper.
• Some insurance premium calculators let you customise your insurance policy where you can add newly insured members and club add-on benefits.

Adequate financial planning before taking a health insurance policy helps avoid the risk of premium default. In addition, this ensures that the insured is always covered for medical emergencies. That being said, using a premium calculator helps determine monetary obligation towards an insurance policy and allows one to manage finances accordingly. 

What Do You Mean by Health Insurance Premium?

While you are taking up medical insurance, the monetary assurance is provided by the insurer to you, the insured. For the policy, you have to pay a fixed amount decided on your criteria at a regular interval period to the insurer. This is known as a health insurance premium.

How is Health Insurance Premium Determined?

Insurance companies consider several factors to consider the premium. These are:

Type of insurance policy

The benefits and sum insured of a health insurance policy determine its premium. The premium amount also depends on add-on covers and accompanying benefits.

Age and gender

Age plays an important role in determining health insurance premiums. Typically, applicants who belong to a higher age group are considered to be more risk-prone. Note that the premium amount varies from individual to individual based on multiple factors. 

Medical history

Most insurers require pre-medical screening to identify any current health complications (pre-existing conditions) of the applicant. The premium for people with a family history of diseases such as heart conditions, cancer, and diabetes is usually high. 

Body Mass Index (BMI)

Individuals with higher body mass index (BMI) are more prone to heart diseases, diabetes, high blood pressure, etc., which often increase their premium. 

Smoker/non-smoker

Regular smokers are considered to be more vulnerable to asthma and heart diseases than non-smokers. This can increase their premium substantially.  

Profession

Those working in a hazardous environment or having a stressful job are more likely to suffer from health issues and incur medical expenses. This can affect their insurance premium as well.

Factors Affecting the Amount of Health Insurance Premium

As an insurance policy is a personalised plan for any and every individual, the factors which affect the premiums of the health insurance policy stay constant. Some of the factors which affect the premiums of a health insurance policy:

Age: Age is the primary factor affecting the health insurance policy. Younger policyholders have to pay lower premiums as compared to older ones. Younger people tend to be in their best health during their 20s and 30s. They tend to get sick less and recover quickly.

Medical history: There are some diseases which run in the family and it is very likely that you might get them too sooner or later. The premiums will likely be higher for such individuals as they are more likely to file a claim.

Pre-existing illness: If you have any pre-existing illnesses such as diabetes or heart disease, your premiums will likely be higher. Some insurance providers might not even cover pre-existing illnesses while some might have some waiting period.

Coverage amount: The more the coverage amount the higher will be the premiums, as simple as that.

Tenure of policy: Health insurances are most likely to get renewed annually. If you opt for a longer tenure, the premiums will likely be lower.

Also Read: Different Types Of Health Insurance Policies

How to Reduce Health Insurance Premiums?

The following are some tips to reduce one’s health insurance premium:

Tip 1: Go for a family floater plan

Family floater plans can be a cost-effective solution to cover multiple members of your family under the same policy. Most family floater plans provide coverage to spouses and children, while some may extend coverage to parents. Since the risk of hospitalisation is usually low, the premiums are not that expensive.

Tip 2: Copayment options

Copay in health insurance refers to the percentage of the claim amount borne by the insured. The rest of the amount is paid by the insurer.  The copay clause and the percentage amount that the insured and the insurer have to pay on a sharing basis are mentioned in the policy.

Tip 3: Get insurance early in life

Insurance companies charge a higher premium as one gets older due to increased risks. However, opting for an insurance plan at an early age attracts a lower premium.  

Tip 4: Opt for top-up plans

Instead of choosing an insurance policy with high coverage, one can add low-cost top-up plans to existing base plans. 

Tip 5: Select a multi-year plan

Some insurance companies offer better prices for multi-year plans of two to three years. 

Tax Benefits of Purchasing Health Insurance

Health insurance policies come with tax benefits under Section 80D of the Income Tax Act, 1961. Under this section, policyholders can avail of tax exemption for the premium paid for their choice of a health insurance policy. 

One can claim a maximum tax exemption of Rs.25,000 in a fiscal year if he/she is below 60 years of age. Senior citizens can get a tax exemption of Rs.30,000 in a fiscal year under this IT section. 

Sole earners of a family can get a combined tax exemption of Rs.55,000 in a fiscal year for their spouse, children and parents. Additionally, one can get a tax exemption of Rs.5000 for yearly health check-ups.

Also Read: How To Get Tax Deductions For Medical & Health Insurance Under Section 80D?

Final Word

One must research adequately to choose an insurance policy that accompanies an affordable premium and excellent benefits. A health insurance premium calculator takes into account various complex factors to provide an accurate quotation. All one needs to do is provide personal details of self and family to receive multiple choices of the best health insurance plans offered by leading insurance providers. 

FAQs on Health Insurance Premium Calculator

Before you go…

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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.