A common concern that many people have with respect to investment in Health Insurance is the amount of premium they would have to pay, and the periodic increase thereto, which happen due to a variety of reasons.
Here are a few reasons why health insurance premiums rise periodically:
- Increasing Inflation Rate: With increasing inflation, insurers have to meet rising costs of paying their staff and meeting their operational expenses. Thus, insurers increase premium rates periodically to meet their costs and ensure smooth functioning of their organization.
- Advancements in Healthcare: As the healthcare sector is advancing at a rapid pace, newer technologies and sophisticated equipment are being used for diagnosis and treatment of various diseases, which are expensive to acquire and operate. The cost of healthcare thus rises, which requires a greater amount of coverage. This is facilitated through a rise in the health insurance premium amount.
- Age Factor: As one ages, there is a higher requirement for medical aid and regular check-ups, tests and consultations to maintain good health. Thus, keeping these points in mind, an insurer may periodically increase your health insurance premium as you age.
- Lifestyle Factor: Insurers often quote attractive premium rates to prospective customers with good lifestyles: regular exercise, no smoking, etc. Conversely, your premium may be increased by the insurer if you are a regular smoker, or if you do not exercise regularly.
- Family History: The premium amount is also affected by your family history. In case there is a history of a hereditary ailment in your family, there is a possibility you may be affected by the same in the future. Hence, the insurer, with this possibility in mind, may increase your health insurance premium amount to provide for such contingencies.
- Rising Chronic Conditions: With rapidly paced lives and lack of attention towards fitness, many people are falling prey to chronic conditions such as diabetes, hypertension etc. which require long-term treatment and maintenance. Insurers thus increase the health insurance premium amounts to cover for long-term expenses of medication, tests and consultations for chronic ailments.
Learn more about different Health Insurance Plans here.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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