What is a Health Insurance Premium: A Beginner's Guide

The rising costs of healthcare have led to an increased demand for health insurance in India. The importance of having adequate health insurance coverage cannot be overstated. There are several insurance providers in the market that provide various types of health insurance coverage in lieu of a health insurance premium that the insured pays to the insurance provider.

Table of Content

• What Is Health Insurance Premium?
• How Does Health Insurance Premium Work?
• Why Is Premium Payment Important?
• Are Health Insurance Plans with Low Premiums a Good Option?

When you buy health insurance, the premium is one of the most important considerations for making an informed decision. Here is more information on health insurance premiums:

What Is Health Insurance Premium?

The meaning of health insurance premium is simple. It is the amount paid by an insured person to the health insurance provider for availing health coverage. The frequency of premium payments can be monthly, quarterly, or yearly, depending on what the insured chooses while applying for health insurance. It is crucial for the insured to keep their insurance active in order to get the best benefits of a health plan. The insured can be an individual, family, or the employees of an organisation.

Health insurance premiums must always be paid on time, regardless of whether the coverage has been used or not. In fact, when you do not put in a health insurance claim for the policy duration, you can avail a No Claim Bonus, which helps reduce the amount of money you need to pay for the health insurance.

How Does Health Insurance Premium Work?

Health insurance premium varies from person to person, as it is affected by various factors. Some of the factors that impact the health insurance premium are the total sum insured, type of policy, the age and gender of an individual, and if the individual has any pre-existing health conditions.

For example, if you opt for a higher sum insures, you will also have to pay a higher premium.

The premium also varies on the facilities or inclusions that are covered under the health insurance plan, such as hospitalisation costs, maternity cover, ambulance charges, day procedures, and more. The premium also changes based on if an individual opts for any health riders or add-on covers. Generally, young, healthy individuals are offered lower premiums for health insurance.

Here is how your health insurance and premium work:

Choose a Plan

Choosing the right health insurance plan is crucial. The health insurance premium you have to pay will also depend on whether you are an employer getting a group health plan for your employees, if you are getting a single health insurance plan for the entire family, or if you want to buy an individual plan.

There are several important factors that you must consider when choosing a health insurance plan. These include coinsurance, deductibles, and premiums. This will help you make an informed decision based on your budget and the benefits on offer.

Make the Premium Payment

Once you have selected the health insurance plan, you must pay the premium, which can be a monthly or yearly payment. To get a better idea of how much you will be required to pay as a health insurance premium, you can use an online health insurance premium calculator. Many insurance providers also allow you to choose the frequency of premium payments when you buy a health insurance plan.

Why Is Premium Payment Important?

When you buy health insurance, it is important that you pay the premium on time to avail its benefits. Several insurance providers also offer a grace period after the health insurance has lapsed. You can pay the premium during the grace period to enjoy continued health coverage.

However, if you do not pay the due premium even during the grace period, your health coverage will lapse and you will lose all benefits of continued health insurance coverage, like the No Claim Bonus, if applicable.

In case your health insurance lapses, you will need to apply from scratch for a new insurance policy, which may require you to undergo health check-ups. The premium will also rise as you age and buying a new policy will cost you much more than if you renew an existing policy.

Are Health Insurance Plans with Low Premiums a Good Option?

There are several aspects of a health insurance plan with low premiums that must be considered to ascertain whether it is a suitable option for you. All individuals have different health insurance requirements and will need different health coverage.

In most cases, health insurance plans that have low premiums also offer less coverage and benefits. That is why it is crucial for you to compare different health insurance plans and the coverage they offer against their premium.

You can explore some of the best health insurance plans at Muthoot Finance. Offering a range of individual and group health insurance policies and numerous riders, Muthoot Finance ensures that you will be able to find the right balance of health insurance coverage and premium with ease.