A lack of interest towards maintaining a proper health insurance policy can put one in quite a dilemma. If, for any reason, you fail to keep up with the details of your health coverage, you might end up paying a much higher premium than you ideally should have.Understanding the essentials involved in your health insurance policy, its coverage, and the premium to be paid is something that needs to be done proactively.
In most cases, if you buy a health insurance plan when you’re 25, and the premium increases when you’re nearing 30, it is because of a reason. Here’s more on why health insurance premiums rise as you grow older and what you can do about it:
How are premiums for a health insurance plan determined?
Every year, an insurer develops the profiles of different types of patients to determine what the premiums for health insurance should be.There are several factors that are taken into consideration in forming these profiles, upon analyzing which the insurer is able to calculate a premium amount for a health insurance policy. Some of the most common factors that can affect health insurance premiums are:
- If you are suffering from any pre-existing medical conditions
- Your family medical history, including that of chronic diseases
- History of surgeries, accidents, ongoing treatments, etc.
- Your Body Mass Index
- Choice of profession, whether you are working in a high-risk work environment
- Your marital status
- If you are under the coverage of an insurance already
- The city where you live
Apart from these basic factors that affect the calculation of premiums for insurance, there are some factors that play a role in the increase of the premium amount. Primarily, a health insurance premium may go up because of two reasons:
- Rising age: As you grow older, the probability of you having health issues also increases; and so, the premium also goes up.
- The rising medical costs: Factoring in the regular advancements in health care and inflation, it is no surprise to see that medical costs are rising each year. Dealing with this inflation is another reason why insurance companies tend to hike up the premiums.
Age-related health issues
More than 40% of the adult population over the age of 60 has a combination of risk factors known as metabolic syndrome. This puts people at an increased risk for developing diabetes, cardiovascular diseases, and certain cancers. Then, about 50% of the elderly population is affected by arthritis. Also, approximately 44 million adults over the age of 50 (mostly women), suffer from osteoporosis. It is a fact that our immune system and body becomes weaker with age and we aren’t able to ‘bounce back’ from illnesses as we used to, as we get older.This just acts as another factor that increases the need for a good health insurance plan as we grow older. On the other hand, this is also one of the factors that play a role in increasing the health insurance premiums that we have to pay as we grow older.
What can you do to mitigate the rising cost of your health insurance?
Now that you have a basic idea about how the premium for a health insurance plan is calculated, it is time that you take into consideration the different ways in which you can reduce the same.
- Staying up to date on the various health insurance regulations that are passed by the IRDA
- When you invest in a family floater plan,you can pay a smaller overall premium
- If you put in some effort into staying healthy and having a less elaborate medical history, your premium will be lower
- At the time of renewal, you can shop around and compare different policies by different insurance companies to avail less expensive premiums
- Avoidinginvesting in a health insurance plan that has a Claim Holding
- Opt for a policy that has ahigh top-up/deductible
- Pay close attention to your company’s policy of raising premium rates for particular age groups
What should I do?
Buying a health insurance plan might involve a fair amount of doubt on your end, and with that kept in mind, here are the answers to some of the most common “What should I do” scenarios that people face:
What should I do if I do not have a plan yet?
The most commonly asked question, with the most obvious answer; if you do not have medical insurance yet, you need to get it as soon as you can. The sooner you get it, the better it is. As has been discussed above, premiums tend to rise as you grow older, and the more you wait to get your first medical insurance, the higher premium you will have to pay. Plus, a lot of companies offer lifetime renewal options to their policy holders, where they can get their policies renewed without worries; however,the same companies might have a limit on the entry age for buying insurance.
Apart from this, a health insurance plan tends to have numerous benefits to offer, including acting as a financial back up in times of medical emergency.
What should I do if I am enrolled in a corporate plan?
Even if your company offers you a good corporate health plan, it is always a good idea to supplement it with an individual plan of your own. A group insurance might cost less, but it also cannot be customized to suit your particular needs and specifications. Plus, you also need to be aware of the stipulations of a corporate plan.For how long will you be covered under it? What happens when you quit? What if the plan is discontinued? While a corporate plan might prove to be pretty helpful, it is always a good idea to back it up with a good individual healthplan.
What should I do if I already have insurance?
If you already have insurance, all is well and good, as long as you put in the due research while buying the insurance. Make sure that the insurance that you have is perfect for your particular needs, and when time comes to renew it, make sure to look around to see if there are plans that offer you a better deal than your present plan.
Medical Inflation rate in India
While the Indian healthcare sector is expected to grow to worth $ 280 billion by 2020, it is obvious that the healthcare costs will also be affected. The sector is said to be growing at a compound annual growth rate of 16%, which has led to a dire need of proper insurance policy frameworks across the population. Add to this the fact of increasing premiums with age, and buying a health insurance policy has become quite imperative.
Medical emergencies can happen at any time, and can wipe off a considerable chunk of your savings. So, while paying for your health insurance on time is always a good idea, you also need to augment your knowledge about how health insurance works. This way, not only do you buy and maintain a health insurance that suits you perfectly, but you also stay well-informed about how policy premiums may vary across your lifespan.