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The aphorism, “health is wealth” is a timeless quote that has growing importance now, more than ever. Rapid changes in lifestyle and technology have led to various health challenges and protecting ourselves from them should be our topmost priority. One of the ways you can achieve this is by purchasing the right health insurance that can offer a host of benefits. Today, there are a plethora of health plans available for you to review and purchase. With health insurance, you can be better prepared to deal with a medical emergency. So how is health insurance premium calculated? There are some key factors that affect health insurance premiums. Let’s look at these to help you make an informed decision.

Important Update (Dated May 30, 2024) – Good news for Health Insurance policyholders! According to the Master Circular on Health Insurance Business 29052024 rolled out on May 29, 2024 by IRDAI, insurers are to decide on the request for cashless claims within 1 hour of receiving the request. Also, the final claim is to be granted within 3 hours after the policyholder’s discharge from the hospital. Insurers have been directed by IRDAI to establish necessary systems and procedures for this process by July 31, 2024.


The Master Circular on Health Insurance Business 29052024 circular is available here -

9 Factors That Affect Health Insurance Premiums

Here are some key factors that affect health insurance premiums:

1. Pre-Existing Medical Conditions

When you apply for health insurance, you will be required to submit your health records to the insurance company. This is mostly done to gauge whether you have any pre-existing health conditions or not. Many insurance providers don’t cover individuals with a pre-existing disease, and those who do, generally charge higher premiums. If the policy doesn’t cover pre-existing conditions, then you will have to bear the cost of medical bills arising due to the pre-existing condition.

2. Family Medical History

If your family members suffer from specific medical conditions, then your health insurance provider will charge you a higher premium. This is primarily because genes play an important role in determining the functioning of our bodies. Their impact simply cannot be underplayed as many medical conditions have a genetic basis.

3. Body Mass Index (BMI)

Individuals with a higher body mass index are susceptible to diabetes, heart problems and joint problems. Hence, if you have a higher than normal BMI, you will be charged a higher premium as compared to a person with a low or normal BMI. You can use our BMI calculator to keep a check your body mass index.

4. Lifestyle Habits

Many health insurance companies refuse services to individuals with habits like smoking, drinking, or chewing tobacco. This is because such individuals are vulnerable to life-threatening conditions like cancer and heart problems. Companies covering such people charge a higher premium for health insurance policy.

5. Gnder

There is a different premium rate for men and women. This is based on the assumption that women are more likely to be cautious in terms of taking preventive measures, regular health check-ups, etc.

6. Age

It is a fact that as we grow older, our immunity and overall health weaken. This leads to frequent visits to the doctor and consequently higher medical bills. That is why young individuals are charged a lower health insurance premium as compared to their older counterparts.

7. Profession

If you work in an environment where you are exposed to hazardous chemicals, radiation, and dangerous substances, then the health insurance premium charged will be more than the average and, in some cases, even higher.

8. Co-Payment

Copayment in health insurance is the portion of claim amount that you will have to pay out of pocket. For example, if you have a 10% co-pay, your insurance provider will pay 90% of the claim amount, while you pay the rest. Health insurance plans with a higher co-pay will charge a lower premium as compared to plans that have a lower co-payment clause.


9. Add-On Covers


Add-on covers, or riders, are additional coverages that you can buy along with your basic health insurance plan to enhance the scope of coverage of your policy. These add-on covers come at an additional cost over and above the premium of your base policy. Some of the most common add-on covers in health insurance are maternity cover, critical illness cover, personal accident cover, etc.

Final Takeaway

Now that you know what factors affect health insurance premiums, it is advisable that you research carefully before opting for a health policy. What’s more? You can apply for your health insurance online in an easy, convenient, and hassle-free way and reap numerous benefits. Use the Bajaj MARKETS ‘Health Insurance Premium Calculator’ to compare various health insurance plans and choose a plan that suits your health needs and fits your budget.

Health Insurance Plans Available at Bajaj Markets

FAQs on Factors That Affect Health Insurance Premiums

Does my location affect my health insurance premium?

 Yes, your location is one of the factors that affect health insurance premiums. Insurance providers may charge a higher premium for certain geographic locations due to the climate conditions, lack of healthy food options, etc.

Would I be charged a higher premium if I have not been insured previously?

 Yes, insurance providers may charge a higher premium for your health insurance if you are not insured previously. This is because they believe that since you were uninsured previously, you would now consult doctors and hospitals frequently to start reaping the benefits of your new health insurance policy, and hence they increase the premium costs.

Does a lower premium mean that the health insurance policy will not have sufficient coverage?

 No, this is not true. The health insurance premium will differ from insurer to insurer and is based on various factors like age, medical history, etc.

Will I have to pay GST on my health insurance premium?

 Yes, a GST of 18% is levied on your health insurance premium.

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