Medical emergencies can happen at any given moment; the healthiest individuals can fall ill without any prior warning, which may eventually require expensive medical treatments. During such medical emergencies, a well-planned health insurance policy can come in handy as it can help us tackle the costs of the requisite medical procedures.
What are health insurance plans?
A health insurance policy, also known as medical insurance, is a financial policy which covers or reimburses insured customers for their medical expenses, which include hospitalisation, surgeries or even common medical treatments.
The monthly insurance premium is the fixed amount of money determined by the insurance company. The customer must pay the premium monthly to avail of the health insurance plan and ensure that the policy remains active throughout the duration.
Health insurance premiums for parents
Although it is recommended that everyone should have medical insurance, elders, specifically our parents, must have medical insurance as, statistically, they are at a higher risk of health-related issues.
While calculating our parents health insurance premium, we must remember that each health insurance policy is different. And so, each individual’s health risks require policy duration, and features will be different and unique.
Factors that determine the Health Insurance Premium
- Age and Gender – One of the most important factors when determining the health insurance premium is the customer’s age, as people at a higher age are more prone to certain diseases like cardiovascular diseases, diabetes etc. Hence the premium amount for senior citizens is much higher. Gender is another such factor; statistically, women are less prone to heart-related complications, so their premium amount is lesser compared to men.
- Medical History – Most health insurance companies require their customers to take a pre-medical screening test. The result of this test allows them to evaluate the health-related risks that the customer might face in the future, and hence it helps them to determine the premium amount required for the policy. Additionally, some companies analyse the family health history, hereditary diseases, etc.
- Policy Term – The length of the policy term opted by the customer significantly affects the premium as a short-term policy has a higher premium rate. In contrast, most insurance companies give specific discounts to customers who opt for a long-term policy.
- No Claim Bonus – A No Claim Bonus is a discount the insurance company provides when no claim is made throughout the term.
- Lifestyle – The customer’s lifestyle plays a vital role in determining the policy’s premium amount; for example, the premium is generally higher for smokers or people with above-normal Body Mass Index.
Tips to reduce the premium in parents’ insurance policy
It is a known fact that more people want to opt for health insurance plans, but the steep premium rates eventually keep them away. Here are specific tips which can help us lower the premium rates of the health insurance policies.
- Long Term Plan – Short-term policies have significantly higher premium rates; hence it is advisable to always go for long-term plans, preferably a multi-year plan. It will have a much cheaper premium rate, and the long-term plan will eventually keep you secured for a longer time.
- Deductibles – Deductibles are the amount of money which has to be paid by the insured during treatment; hence a higher deductible will lead to a discounted rate of the monthly premium.
- Multi-Member plan – A multi-member policy will have a lesser premium rate than an individual policy plan. Hence it is advised to insure the whole family with a “Family Floater Plan”.
- Compare – Insurance plans, like all services, are a competitive domain; hence different insurance companies provide different premium rates. It is wise to compare all available options before purchasing a medical policy to meet one’s healthcare requirements.
- Public Sector Returns – Although not entirely related to premium rates, insurance companies are well known to invest in public sector investments. If the gains accrued from such capitalisations are not satisfactory, this will eventually make the premium rates steeper than usual.
When buying a health insurance policy, be it for our parents or at a young age, health insurance policies protect us from sudden medical emergencies and have certain tax benefits. Under section 80D of the Income Tax Act, 1961, one can avail of tax exemptions equal to Rs 25,000 if the policy owner is below 60.
If the policy owner is the sole breadwinner of the family and is also paying the premiums of their family, including parents, then they can avail of a combined tax exemption of Rs 55,000 per year.
Health Insurance Premium Calculator
Most Health Insurance companies provide a dedicated online policy calculator. With the help of the above information and tips, we can calculate health insurance premium which suits our budget and requirements better.