How is health insurance premium decided? Why do different people have different premiums?
Vijay Patel, Baroda
The amount of premium for medical insurance depends on numerous factors and is calculated on the extent and nature of the cover you want. The rate of premium is directly related to the amount of sum insured. Also, if the insured is at a higher risk, he will be charged more premium. For example, an older person will have to pay a higher premium for health insurance for the same sum insured. Further, two people with similar profiles may have to pay different premiums as their medical conditions may differ. Insurance companies also take into account the medical condition of the insured in the previous years and the number of claims filed by a person in last one year. All these conditions impact the premium amount for the future years.
