Health Insurance Premium Calculator

According to recent reports published in India Today, the average retail healthcare inflation in India for 2018-19 was 7.14%. This marked a steep rise from previous years’ 4.39% marking a rapid increase in the cost of healthcare products. (1)

In this scenario, a health insurance policy no longer remains a mere precaution but has become a necessity to avoid incurring huge financial losses against competent medical care.

Now, assuming that you are availing a health insurance policy, what is the absolute first thing you must know about it?

It's the premium payment, of course!

Following is an elaboration on how you can calculate your health insurance premium, factors affecting it, and how you can reduce the same!

What is a Health Insurance Premium Calculator?

With the advent of technology, most insurance companies have also shifted their operations online. They have subsequently introduced various useful online tools that make things significantly easier for policyholders!

The health insurance premium calculator is one such tool that allows you to calculate your insurance premium amount in a jiffy!

Since calculating the premium amount can be a cumbersome task, most people simply go forth with the amount that is suggested by their insurance providers. But with the help of an online calculator, the premium amount can be computed in a matter of minutes by entering a few requisite details.

Using a health insurance policy premium calculator imparts numerous benefits. Following is a list of benefits that you can avail if you use the online health insurance calculator to calculate your premium amount:

• Makes way for easier financial planning - By using this calculator, you will have an accurate estimate of your premium amount before you purchase your policy. This way you can plan your finances more effectively for the future.
• Reduce risks of defaulting premium payments - Knowing the premium amount beforehand eliminates the chances of defaulting on premium payments in the future. You avail a policy only after knowing the premium amount which you can afford.
• Avail the insurance plan according to your requirements - With the health insurance premium calculator, you can adjust various parameters under it until you arrive at a plan which is affordable and can help suit your coverage requirements with ease.
• Makes choosing Add-ons easier - The medical insurance premium calculator displays all the add-on covers for a health insurance policy that can help you meet your financial necessities. It can thus help you calculate the premium payable if you avail add-on covers with your health insurance policy.
• Helps you choose the Best Health Insurance policy - The premium calculator displays the health insurance policies from different insurance providers and allows you to compare between them. This makes the process of availing a suitable insurance policy much easier.

Calculating your premium payable by using an online insurance premium calculator is pretty simple!

You only need to follow a few steps, enter your details correctly and voila! You will have the premium payable for a health insurance cover.

For example, if you are looking for a health insurance policy from Digit insurance, you can easily calculate your premium payment liability.

Take a look!  

Based on the options you have chosen; you will be provided with your annual premium payment amount to avail the health insurance cover.

Yes, it is as simple as that!

No cost, no hassle – only a few minutes of your time and you will know the amount you will have to pay to purchase the health insurance plan!

Now that you have learned about how to calculate the health insurance premium amount using the calculator, take a look at the factors that affect your payment liability – 

1. Expenses incurred for Marketing and Administration

Insurance companies incur huge expenses under administrating and marketing their products. These costs trickle back to the policyholders and reflect on their premium payments. 

2. The Type of Plan you opt for

Your premium payment for your health insurance policy depends, to quite an extent on the type of plan you choose to avail.

For example, individual health insurance plans are more expensive than family floater plans and you will have to shell out more in premium payments with the former one. 

Know more about:

• Individual Health Insurance
• Family Health Insurance
• Health Insurance for Senior Citizens
• Health Insurance with Maternity Cover
• OPD Cover Health Insurance

3. Co-payment Clauses and Deductibles

Few health insurance policies come with mandatory or voluntary co-payment and deductible clauses. With deductibles, the policyholder has to bear a part of the treatment expenses before their insurance policy kicks in.

With the co-payment clause, you will have to cover a percentage of the total treatment expense while the rest is covered by the insurance provider. But with co-payment and deductibles, the premium payment for the insurance policy is reduced to quite an extent. Thus, these are some of the factors which affect your policy premium.

Know more about the Difference between Copay, Coinsurance & Deductible

4. Add-on Covers

Add-on covers are one of the parameters that you have to provide in the health insurance premium calculator while calculating the premium amount.

This is because, when you opt for add-on covers over the existing benefits from a health insurance plan, your premium payment for the policy automatically increases.

5. Investment and Savings

Most insurance companies invest their capital in various public sector companies. These investments follow the guideline put forth by the IRDA to make sure that there are no compliance issues later on.

The premium you need to pay for insurance policies depends, to an extent, on the gains acquired by the insurance providers from market capitalisation.

6. Purchasing the Insurance through a Broker

Well, even though this does not increase your premium payment, per se, it does increase the total amount you pay for the policy. This is because you will have to factor in the charge levied by the broker for the service they provide.

7. For Pre-existing Disease Coverage

If you are availing the health insurance policy for covering pre-existing diseases, you will typically be provided with a waiting period, after which you can avail the benefits of the policy.

But there is a way to work around this waiting period - that is by paying an extra premium amount. Thus, your premium payment will also depend on whether you are availing a pre-existing disease cover.

8. Mortality Rate

Premium payment depends on the rate of mortality because this is the cost that insurance providers have to bear in case of any eventuality to any customer.

As a result, the premium payment differs for different age groups, with it generally being higher for senior and super senior citizens.

9. Medical Underwriting

Each insurance company offers several types of products like individual policies, group insurance policies, family floater policies, etc.

The underwritings for these policies are done in such a manner that the risks from each of these policies are balanced and the liabilities of the insurance provider are managed.

Thus, the premium for insurance policies also depends on how risky an individual is as a policyholder, based on their medical information.

10. Base Rating

This is the factor where insurance providers set a base rate that is charged to a particular set of individuals for possessing same characteristics like gender, age, family size, geographical region, their profession, etc.

For example, the base rate is set in a manner that individuals belonging to the age group between 40 and 50 years have to pay a higher premium than those belonging to the age group of 25-35 years.

Well, there are a few easy ways through which you can do it! For instance:

1. Avail a policy at a young age

One of the most eminent ways of saving on your premium payment for health insurance policies is by opting for the cover at a younger age.

For most insurance companies, the insurance premium increases as a person get older since they are more prone to illnesses. That is why it is best to avail the insurance when you are young and healthy.

Also, if you are purchasing the policy for your parents, make sure you do so before they turn 60 years, as premium payment for health insurance for senior citizens is higher.

2. Opt for Deductibles/Co-payment

Opting for deductibles and co-payment allow you to reduce the premium on your insurance policy. While deductibles and co-payment clauses require you to cover a portion of your treatment costs, they subsequently ensure that the premium paid towards your insurance policy is lowered.

3. Choose Top-up Plans

Since opting for a high coverage amount means a higher premium payment, you can seek a policy with lower coverage.

Further, to make sure that your financial liabilities for seeking treatment remains low, you can avail a top-up on your insurance plan, which will come into effect when the base-sum insured is exhausted.

4. Be careful while Choosing Add-on Covers

To make sure you are not paying more for your health insurance policy, be careful while choosing your add-on covers.

Choosing the ones you don’t require will only lead you to incure more cost for your insurance cover than what is necessary.

5. Purchase directly from your Insurance Provider

Purchasing your insurance policy through a broker will make your insurance policy more expensive. This is because you will be liable to pay the charges for their service, as well. To avoid this, you can purchase the insurance policy directly from your insurance provider. 

6. Choose the Plan according to your Zone

Suppose you live in a Zone C city, where treatment costs are much lower than that of Zone A or Zone B cities. The premium you pay for your health insurance policy to cover treatment cost in a Zone C city should, thus, also be lesser than that of the other two.

At Digit, we have two zones: Zone A (Greater Hyderabad, Delhi NCR, Greater Mumbai) and Zone B (Rest of India). You get an additional discount on premium if you are based in Zone B. Not just that, we have No zone-based co-payment.  

7. Check the No Claim Bonus Policy

No claims in the Policy year? You get a bonus -an additional amount in your total sum-insured for staying healthy & claim free!

This bonus, also known as the Cumulative Bonus, is a certain percentage of the Base Sum Insured for every claim free year.

With Digit, it is 10% or 50%, up to max 100%, depending on your plan.  

As a result, your total sum insured increases. However, this bonus gets nullified if you fail to renew your insurance policy after it expires. 

8. Go for Family Floater Plans

Opting for a family floater plan instead of individual plans, where two or more people are covered under one plan, allows you to reduce its cost.