Deepak Yohannan of myinsuranceclub.com writes on the reasons why health insurance premiums increase with age.
While health insurance is a practical and necessary investment, one tends to grimace at the increase in the regular instalments of health insurance premiums with increase in age. People may start to wonder why they have to pay such high premiums even if they are fit and healthy.
Unfortunately, insurance companies protect their own interests and the more you age, since you become susceptible to illness and disease, with rising cost of medical treatments you pose a greater risk to them. This is by and large, the reason why your health insurance premium increases as you age.
How is health insurance determined?
Well this is how it works – the insurer regularly evaluates key factors which determine health insurance premiums. A major factor here is claim statistics. Your insurance company will evaluate and review profiles of patients and determine which individual is costing them more money – pinpointing those who require more frequent medical care.
An older male might require blood tests for diabetes, blood pressure checkups, cholesterol reviews and attention to heart issues. He might require surgeries or certain procedures to strengthen failing bones or eyesight. Specialist care might be required which is expensive. All these factors are not considered or even present for a younger man.
Similarly, a woman who is ageing might need regular checkups which include mammograms, gynecological procedures, pregnancy and delivery and age related bone therapy, problems which younger women will not encounter. At best younger individuals will need vaccinations and other such routine procedures when they are very young.
With rising medical costs such as cost of surgeries, prescription medication, doctor and hospitalisation fees etc insurers will also have to protect their own interests from inflation.
Naturally, their customers will feel the pinch because they will hike the fees of the services they offer them – in the form of premiums. Since older people present a higher cost to the insurance company, they will have to pay more.
After comparing and evaluating different patient profiles and evaluating how many patients they will cater to, insurance companies fix the rates of policies and premiums.
However, even if you are relatively healthy and find yourself paying what you consider exorbitant amounts of money as health insurance premiums regularly, it is still an investment which will save you a signifcant amount of money in case you have a medical emergency.
Research ways in which you can reduce the amount you pay as premium – some tips include:
• Family floater policies which allow you to pay lesser premium overall as a family
• Staying healthy and having a less chequered medical history
• Changing insurance companies to avail of less expensive premiums as you age even if that means you have to accept a few exclusions and restrictions and
• Being updated on the various policies that are available.
Try and get health insurance from your company as well and invest in a policy which you and your employer share premium costs and look up other ways you can reduce your premium as you age.
Whatever be the case, it is not a good idea to discontinue health insurance policies based on the fact that you think paying premiums when you are healthy is unnecessary. You never know when ill health will strike you and in case of a medical emergency, all your savings could be well wiped out.
The author is the CEO of MyInsuranceClub.com , an online insurance price & features comparison portal.The Great Diwali Discount!
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