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10 Factors That Affect Your Health Insurance Premium Costs

Written by Lawrence

Health insurance is such an important aspect of life. But a lot of people tend to overlook its importance. Some people buy a random health insurance policy without much research, while others don’t pay health insurance premium on time which causes the policy to lapse. If you want to buy a health insurance policy, know all about it – factors affecting health insurance premium, health insurance premium rates, and how health insurance premiums are calculated. Once all these points are clear, then buy health insurance as per your requirement and budget to get complete coverage.

What is a health insurance premium?

Let’s start with the basics and understand what is health insurance premium? It is the amount of money that you need to pay periodically to the health insurance company in order to avail health insurance coverage.

How is health insurance premium calculated?

The cost of your health insurance premium is calculated by the health insurance provider based on your age, lifestyle, medical history, and any pre-existing illness. There are certain predetermined parameters that affect the premium price. You can also use an online health insurance premium calculator to know the price of your health insurance premium. It is an online tool that provides you with health insurance premiums for different plans. The calculator uses your age, family members to be insured, sum insured, policy tenure, and similar factors to derive the policy premium.

Health insurance premium rates in the UAE

The healthcare standards and facilities in the UAE are unmatched and among the best in the world. But you should keep it in mind that quality treatment comes at a price. Health insurance is mandatory in the UAE and the cost depends on various factors. Most employers provide medical insurance to their employees, but in some cases, you would have to buy it yourself.

The cost of an average health insurance plan can be 10,000 AED per annum. Comprehensive health insurance plans for expats can cost around 50,000 AED annually. Family insurance plans (for an average family of 4) in Dubai can cost approximately AED 33,500. 

Factors affecting health insurance premium

These are the 10 factors that affect health insurance premium –

  1. Age

Age is one of the most critical factors when it comes to determining health insurance premiums. The general rule is – the higher the age, the higher the insurance premium. Older people are at an increased risk of getting ailments and diseases and that’s the reason that their health insurance premium is high. It is advisable that if you want to buy a health insurance policy, buy it at a younger age as this way you’ll have to pay a less premium amount.

  1. Past medical history

Past medical history is also crucial in deciding the amount of health insurance premium you pay. A lot of times when people ask how a health insurance premium is calculated, experts explain to them that past medical history needs to be taken into account.

  1. Policy duration

The tenure of your policy also plays an important role. If you choose a policy with a longer duration, the premium will be less. This may not be the same for a policy with a shorter duration.

  1. Body mass index (BMI)

Obesity is one of the major reasons for a lot of health issues like – hypertension, high cholesterol, heart related ailments, joint pains etc. People with a higher BMI usually have to pay a higher health insurance premium. This is because they are more likely to get affected by all the above-mentioned health issues and would need medical care on a regular basis.

  1. Sum insured

The sum insured that you opt for also affects the health insurance premium price. Since the sum insured is the maximum amount you can claim from your insurer for medical expenses, a lower SI can result in a lower premium, and vice versa for a higher SI. In case the total expenses exceed your sum insured, you would have to pay the excess amount from your pocket.

  1. Occupation

The nature of work you do and the risk involved in it are also important factors that affect the price of your health insurance premium. People who have a desk job like in a bank, an office, or a school would have less premium as compared to a fireman, people working in the construction industry or other high-risk industries.

  1. Type of plan

There are different kinds of health insurance plans available in the market. The premium price varies for each. For example – the premium price of a group health insurance plan would be less than individual health insurance plans. If you purchase add-on covers, it adds to the total cost and the premium will increase.

  1. Smoker/ Non-smoker

If you are a regular smoker, you will be required to pay a higher premium for your medical insurance due to significantly higher health risks. Regular smokers are more likely to be vulnerable to issues such as lung cancer, stroke, heart disease, asthma, respiratory complications, chronic obstructive pulmonary disease (COPD), and hypertension and the health insurance company keeps these factors in mind when deciding your premium amount.

  1. Pre-existing medical conditions

A lot of people shy away from disclosing their pre-existing medical conditions when buying health insurance. That’s not the right way. It is true that health insurance premiums for people with a pre-existing medical condition is higher, but you should always disclose it at the time of buying your policy.

  1. Geographical location

You may not have thought that the place where you stay can be a factor affecting your health insurance premium. Certain zip codes have a higher premium rate as compared to others. You can get in touch with your health insurance agent to know more details about this.

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About the author

Kritika Manchanda is a content writer with BuyAnyInsurance. She has more than a decade of experience of churning out SEO friendly content. When she is not writing, she is either reading, or making travel plans.

Originally published Mar 03, 2023 10:13:15 AM, updated Mar 03, 2023

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