Understanding Health Insurance Costs

Health Insurance Costs Explained

Health insurance protects your future by ensuring access to necessary medical care when needed. To budget effectively for health insurance plans, you must know your out-of-pocket costs (deductibles) and monthly premiums.

Monthly Cost of Health Insurance Plans in India

Many factors like a policy seeker's health status, age, location, and current coverage amount determine their per-month health insurance cost during a renewal. Most of the time, individuals have to pay between Rs. 500 - Rs. 2,000 to participate in entry-level health insurance schemes. These are individual health schemes, and the family floater plans attract a monthly premium between Rs. 1,500 and Rs. 5,000.

On the other hand, senior citizen schemes are significantly more expensive, with monthly premiums ranging from Rs. 3,000 to Rs. 10,000. This increased cost is attributed to the higher health risks associated with older individuals.

The final cost of owning a health insurance plan also depends on the annual coverage for critical illnesses, the total sum insured and add-on benefits like maternity or accidental coverage. Furthermore, customisations like hospital room rent waivers and zero co-payment also influence the pricing of a health insurance policy. 

Lastly, many people consider health insurance policies a crucial tax-saving tool, as they can save up to Rs. 25,000 per year by investing in these policies.

Factors That Determine Health Insurance Premiums

Below, you get a breakdown of several factors that impact the costs of different health insurance plans:

• Age

When higher risks are associated with the insured person's health, the premiums go up. 

So, to prevent yourself from ending up paying more, you can explore the Senior Citizens Red Carpet Health Insurance Policy from Star Health Insurance. This plan offers flexible premium options for both individual and family floater schemes. Both options protect beneficiaries from pre-existing diseases after the waiting period is over.

• Personal Health

The overall health of an individual and pre-existing health issues affects premium rates. However, the Affordable Care Act (ACA) restricts insurance companies from charging marginally extra premiums to individuals with pre-existing diseases. However, certain lifestyle choices like smoking will still increase insurance-owning costs. 

• Location

Additionally, where you stay also determines the premium amount. This is because larger cities typically result in higher healthcare costs thus demanding more premiums from the policyholders. 

• Plan Type

Finally, whether you pick a Preferred Provider Organisation (PPO), a Health Maintenance Organisation (HMO) or any other category of plan, influences your monthly premium amount. If you select an insurer that is reputed for fewer restrictions and has a broader network of hospitals, then you may be charged more premium amount.