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How is Health Insurance Cost Calculated?

Learn about the process of calculating the cost of the health insurance plan to get the right coverage . To know more about health insurance policies in detail, Visit Now!

  • 3,092 Views | Updated on: Apr 03, 2024

The advancements in the field of medical technology have increased life expectancy tremendously. But medical inflation has led to an increase in the costs of these treatments. Getting a life-threatening illness treated can make a huge dent in your life savings. An effective way of keeping your finances safe from the high costs of healthcare is by getting a health insurance policy. Health insurance provides you with financial coverage in the event of medical emergencies.

Health insurance in India

When you get a health insurance policy in India, you are getting a promise of insurance coverage in the event you or the members of your policy face any medical emergency. Depending on the policy you choose, you can customize the type of coverage you wish to get. In exchange for the coverage you get, you will have to pay a premium amount to the insurance company for the tenure of the policy. The premium amount calculation differs for different insurance companies. However, certain factors affect how health insurance cost is calculated.

How is health insurance cost calculated?

When you have opted for a policy, the insurance company will ask you to provide some basic information about you. These little pieces of information will help them determine the premium amount cost, the sum insured they can provide and other aspects of the policy.

1. Health and pre-existing ailments: Any ailments that you have undergone and your health can have a direct effect on the premium amounts you will pay. Depending on your lifestyle choices or any pre-existing ailments, the insurance company can determine the premium amount. Serious ailments in the past or an unhealthy lifestyle like tobacco use can increase the premium amount.

3. Type of policy coverage: Depending on the policy you choose, the premium amounts may change. If you have opted for a critical illness plan, then the premium amount charged to you can be high. If you opt for an individual policy instead of a family plan, the premium amount will be low.

4. Age of the primary policyholder: Age is one of the most important determining factors of the premium amount. As you age, the number of health issues also increase. Hence, if you opt for a policy when you are young, the premium amount you will have to pay will be low.

5. Nature of employment of the insured: If your work environment involves working with hazardous substances or has high risks of injuries, then the premium amount will increase.

6. Family medical history of the insured: If your family has a history of ailments like heart disease or cancer, then it may lead to a high premium amount. As you face the risk of being treated for any of the ailments from your family’s medical history, your policy will have a premium amount.

While these factors may seem a bit daunting, you can now get a rough idea of how much premiums you have to pay for a policy by simply providing basic information. Kotak Life hosts the premium calculator on their website, to make the premium calculation easy for you. Simply input the relevant information as per the screen prompt and get a quick health insurance quote for your specific coverage needs.

Kotak Life has also released its new plan called the Kotak Health Shield. It is a fixed benefit health insurance plan that offers effective coverage for life-threatening illnesses and accidents. You can also include your spouse in the coverage provided by the policy, and you have the option to enhance the coverage through different features like daily hospitalization cash benefit and waiver of premium for a minor ailment diagnosis. This plan can help you get effective coverage for critical ailments like cancer, liver issues, neuro-related diseases and cardiac issues.

Summing up

Rising costs of healthcare limit the treatment you can get because of their non-affordability. A health insurance policy serves as an alternative to take care of expensive treatments. Insurance companies promise you financial coverage, and in return, you will have to pay a premium amount in periodic intervals for the tenure of the policy. Different factors like age, employment and medical history can affect the premium you pay.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

Kotak e-Term

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Ref. No. KLI/22-23/E-BB/2435