One of the most crucial elements of everyone’s life is to take good care of our health. We all try our best to stay healthy while also ensuring the same for our loved ones. Still, health issues and medical emergencies come to our doors unnoticed and can take a toll on our pockets unless we are prepared to deal with them.
This is where buying a suitable health insurance plan becomes a necessity. With the right medical insurance plan by your side, you can get the best quality healthcare treatment whenever needed without having to worry about the cost involved.
Since you need to pay a certain sum to get adequate health insurance coverage, you need to get an estimate of the premium payable. This is where a health insurance premium calculator comes to the rescue. It can be used to understand how the insurance premium varies with respect to different factors involved.
In this complete guide, we will take you through various sides of a health insurance premium calculator, its working, benefits, steps to use it, and more.
What is a Health Insurance Premium Calculator?
A health insurance premium calculator, or simply a health insurance calculator is an online tool that you can use to get an estimate of the premium payable for a particular health plan. You can use it to calculate premiums for various health plans to find which ones fulfill your particular needs.
Amidst the rising cost of health treatment, buying a suitable health insurance plan is quite essential. Using a health insurance calculator, you can compare different plans offered by one or more insurance companies. Depending on the detailed comparison of various health insurance plans, you can then make an informed selection of health insurance for yourself and/or your family members.
The final premium payable for a health plan depends on different factors such as your age, gender, profession, etc. if any. Each of these factors when changed with respect to an individual result in a different premium amount. Since every individual follows a unique lifestyle, you would want to know the specific premium amount you need to pay to get adequate insurance for health. This is where an online health insurance premium calculator comes to the rescue. You can simply enter or select different values for different parameters (age, gender, profession, etc.) to see how the premium varies.
Variable Parameters in a Health Insurance Premium Calculator
Most health insurance plan calculators use the following variable parameters to give you an estimate of the premium payable:
- Insurance for self, couple, parents, or family
- Your age
- Your location/city
- Sum insured in lakhs (which represents the insurance coverage you need)
- Current health condition status
- Pre-existing diseases or critical illnesses if any
- Health insurance add-ons selected if any
Recommended Read: All About Sum Insured in Health Insurance
Benefits of Using a Health Insurance Premium Calculator
Most health insurance buyers look for reliable sources of information to understand whether buying the plan will benefit them the way they expect. This is where the role of a health insurance policy calculator comes into play.
- It helps compare health insurance plans easily
Health insurance pricing is one of the most decisive factors people consider before buying a policy. They want to compare the pricing of different plans before buying any of them. An online health insurance calculator in India makes this comparison process easier and saves time.
- It gives you an estimate of the premium payable
In the end, you would want to know how much premium is payable to check if you can afford a specific health insurance plan. By using a health premium calculator, you can easily check if the payable amount is within your range of affordability.
- It helps you know how the premium varies with age and other factors
The premium of a health insurance plan depends on your age and several other parameters (as mentioned above). With the help of a health insurance premium calculator, you can instantly check how much the premium varies as you change any of these parameters. In general, the higher the age, the higher will be the insurance premium.
- It helps you understand premium variation with higher risk to health
Lifestyle habits such as drinking alcohol or smoking, tend to increase the risk of healthcare problems, which is why health insurance plans are costlier for a smoker or drinker than otherwise. Using an individual or family floater health insurance premium calculator, you can clearly see the difference in premiums based on lifestyle habits.
- It helps in filtering and shortlisting health insurance quotes
If you have already asked for health insurance quotes from different insurers, you must have a detailed description of the features and benefits of different plans. A health insurance premium calculator can help you cross-check whether it makes sense to go for a plan at a certain price.
- It helps save money
Ultimately, the detailed comparison of different health insurance plans will help you save money by selecting the plan that offers maximum benefits at a price you can easily afford.
- You need not visit an insurer’s office or meet an agent to compare prices
In India, the traditional way to buy a health insurance plan is to call an agent or visit the nearby insurer’s office to ask for available plans and compare quotes. This will not be required once you are done with comparing plans online using a health premium calculator. Once you are convinced with the plan features, you can even proceed to buy it online.
Importance of Using an Online Health Insurance Premium Calculator
You can gauge the importance of a health insurance calculator in India from the following points:
- You need an estimate of the health insurance premium payable before buying any plan.
- You want to compare health insurance plans in terms of pricing, benefits, features, and more.
- You want to filter the best health insurance plan for yourself and/or your family members
- You can save money using a health insurance premium calculator with detailed comparison.
- You want to decide whether to add or exclude add-ons
- You want to see how the premium changes with different parameters
- You do not want to invest time and effort meeting in health insurance agents
What is Health Insurance Premium?
Health insurance premium, as the name suggests, refers to the amount payable periodically to an insurance company to avail medical insurance coverage and ensure that the policy stays active. You can get an estimate of the premium payable using a reliable health insurance premium calculator.
How is Health Insurance Premium Determined?
While you can get a fair estimate of the premium payable using a health premium calculator, the tool itself is designed to work based on various factors. The information entered by you in the calculator is used to give you a hint of the approximate premium.
Here are some of the primary factors that determine the health insurance premium:
Your medical history
Your current health condition, which will be analyzed through pre-medical screening at the time of insurance purchase, will determine the health insurance premium. Based on the results of these tests, the existing diseases, and the risk of certain ailments, the premium will be calculated. Besides this, your lifestyle habits and family health background will also be taken into consideration.
Entry age and gender
The age at which you choose to buy health insurance is directly proportional to the health insurance premium payable. It is because as age increases, individuals become more prone to severe illnesses. Because of the higher risk involved, the premium increases. You can check this using an online health insurance plan calculator. Enter different ages and see how the premium varies.
Similarly, gender is also a decisive factor. In general, premiums for health insurance purchased for female citizens are lower as compared to men.
Selected policy period
The premium of a two-year health insurance plan will be higher than the one-year plan. You may get a discount on buying a multi-year health insurance policy.
Different types of plans, with or without riders or add-ons, are available at different rates. Depending on your needs and lifestyle, you can select a suitable plan and pay for its premium.
No Claim Bonus or NCB
NCB refers to the discount you can avail of on the insurance renewal premium for every claim-free year. You can also accumulate the NCB for multiple years and get a cumulative discount later, as per the insurer’s terms.
Besides these factors, health insurance premiums also depend on the marketing expenses borne by the insurers, investments they made as per IRDA guidelines, policy underwriting, and mortality rate.
Also Read: All About Copay in Medical Insurance
How to Reduce Your Health Insurance Premium?
As more people are now concerned about their health and purchase health insurance, the cost of insurance coverage is still an obstacle for many. Buying medical insurance at the lowest premium may not provide adequate coverage. However, you can reduce the health insurance premium in several ways, as given below:
Select higher deductibles
A deductible is a percentage of the claim amount that you agree to pay for any treatment covered under the health insurance plan. While some deductibles are compulsory, you can also add a voluntary deductible to reduce the health insurance premium.
Buy a family floater health insurance plan
Within a family floater plan, you can cover multiple members of your family. If you have a spouse and children that you want to be covered under the same policy, you can choose this type of plan and pay for a lower premium in comparison to buying an individual plan for each family member. You can also check the premium estimate using a family floater health insurance premium calculator.
Select a multi-year health plan
The premium payable for one year policy is comparatively higher than that of multi-year plans purchased for two or more years. Since the premium is paid at once, many insurers offer a discount on such policies.
Compare health insurance quotes carefully
Both the benefits and premiums of health insurance policies vary from one insurer to another. A careful comparison of insurance quotes you ask for from multiple insurers is advisable. It will help you better decide which plan is best suited for you.
Select health-insurance add-ons only when you need them
Most insurance companies will ask you to add various add-ons to your base plan to provide additional coverage. However, these riders or add-ons are available at an extra premium. Hence, you are advised to select these add-ons only when you feel the need for them to save on the cost involved.
What are the Tax Benefits of Health Insurance?
In addition to insurance coverage, health insurance also comes with tax benefits as defined under Section 80D of the Income Tax Act, 1961. In simple words, the premium you pay for health insurance makes you eligible to avail of tax deductions under 80D. Also, you should know that:
- The maximum tax deduction you can avail in a financial year under 80D is Rs. 25,000 if you are less than 60 years of age.
- If you are a senior citizen, this upper limit is extended to Rs. 30,000 per year.
- If you are the only breadwinner (less than 60 years of age) in your family and pay for health insurance for both your family and parents, you can avail of a tax deduction of Rs. 55,000 in a financial year. It also requires you to make the payment in any mode other than cash.
You can use a health insurance premium calculator to find out how you need to pay to get sufficient coverage under a health plan.
Also Read: What is Health Insurance for Parents?
How to Use a Health Insurance Premium Calculator on Any Portal?
Almost every insurance company and insurance broker now has a health premium calculator available on their websites or apps each of which performs exactly the same function for you. It facilitates you to get an estimate of the premiums for various health insurance plans and then offers a free quote. Once you have compared different plans in terms of benefits and premiums, you can then proceed toward buying the plan online.
All you then need to do is enter your personal details (and your family members), select the plan that best fits your budget, and pay the premium online.
Is it possible to calculate health insurance premiums online?
Yes, you can use online health insurance calculators in India to get a premium estimate in just a few easy steps.
Why should I use a health insurance plan calculator?
Using a health insurance calculator saves time and is very cost effective. You can easily compare plans before selecting the best one.
Does health insurance premium calculator ask for lifestyle habits?
Along with providing your personal details, you will also need to provide accurate details of your habits such as smoking or drinking.