How to Calculate the Ideal Health Insurance Premium?
If you are searching for a health insurance, one of the most important considerations is how much premium you’ll have to pay for it every year. But have you ever wondered how insurance providers calculate the premium? Do you know that you can now use health insurance calculator to calculate premiums for different policies and select the best easily? These are some important details discussed in this post. Keep reading.
While the premium shouldn’t be the only decision-driving factor when selecting a health insurance, it certainly is one of the most important considerations. You should be able to easily and conveniently pay the premium of the health insurance without the need to stretch your finances. It neither has to be low so that it does not provide adequate cover or too high so that it puts a stress on your finances.
Don’t you wonder about how insurance providers calculate the premium? Is there any regulatory body managing the cost of these policies? Can you calculate health premium on your own? Let us try to answer these common questions.
How is the Premium Calculated?
The insurance providers consider a number of factors like your age, medical history, pre-existing conditions, whether you are a tobacco user or smoker, etc. for calculating the premium of your health insurance. These factors are acknowledged by the IRDA (Insurance Regulatory and Development Authority).
For example, let us assume that you are looking for a particular health insurance from an insurance provider with a cover of Rs. 5 lakhs. If you are young, say around 25-years-old, the health insurance cost would be significantly lower than what it would be if you were in your 40s. Similarly, if an individual is a 35-years-old smoker, the premium for his policy would be higher than the premium of a non-smoking individual buying the same policy at the same age.
This is because as your age increases and when you are a smoker/tobacco user, you are more prone to ailments as compared to someone who is young or someone who is a non-smoker. Apart from this, the insurance provider is also required to manage their additional expenses like marketing and services, investments, savings, etc. These additional costs are taken into consideration by the provider too when you calculate health insurance online.
How Can you Calculate the Health Insurance Premium?
You can easily know your health insurance premium online without getting into any kind of difficult formulae or calculations. Simply search for a premium calculator online, and you’ll find a number of reliable options.
All you need to do is to enter some basic information about yourself like the policy you are interested in, your age, pre-existing conditions if any, smoker or tobacco user, etc. and the calculator would instantly calculate the premium for you.
Benefits of Using Online Premium Calculator
Let us have a look at how these calculators can benefit you-
- It provides an accurate estimate of premium with the help of which you can pick the right policy
- You can use the health insurance premium calculator to compare the policies, especially at times when there are two similar policies with same features and benefits
- You can also pick add-on coverage offered by the insurance provider and know the total premium
Tax Benefit of Buying a Health Insurance
Another important thing that you should know about health insurance is that the policies are eligible for tax exemption under section 80D of the IT Act. If you are under 60 years, you can get an exemption of up to Rs. 25,000 in a financial year and if you are above 60, the exemption limit is up to Rs. 30,000.
If you are a sole earner and paying the premiums of the health insurance purchased for your family members, you can get a combined exemption of up to Rs. 55,000. There is also an additional exemption of up to Rs. 5,000 for annual health checkups.
In simple words, the higher the premium you pay for your health insurance, the more money you get to save on the income tax. You can use online health insurance calculator to know how much premium you need to pay for having sufficient coverage.
No matter if you are planning to buy a particular health insurance or are confused with the available options, calculating the premium is a simple and effective way to pick the best. With the availability of online premium calculators, this process is now simple and quick.