Impact of age on the premium of a health insurance policy

Impact of age on the premium of a health insurance policy

Health insurance is a necessary financial tool to safeguard oneself from any medical financial burden in case of any unforeseen circumstances.  The factor of unpredictability can only be mitigated through an insurance plan that protects the person’s interests in case of a medical emergency. In order to purchase a health insurance policy, there are a number of factors that one has to evaluate – one of them being “Age”. 

An important factor especially when considering the insurance premium amount is age. The premium increases since when we are younger the chances of encountering health issues and paying medical expenses are low –  thus the cost of health insurance premium is also lower. This increase in premium is attributed to factors that come with age. Here’s a closer look at the those factors: 

1. Lower immunity

As we get older, our immunity can drop. This leads to risk of contracting illness more frequently. With aging, our bodies struggle to fight some diseases – which in turn leads to hospitalization and higher medical expenses. The increased probability of incurring a disease is what leads to a higher premium as the insurer assigns a risk of potentially higher number or value of claims made against the policy in future.

2. Critical Illness 

As you get older, you are more prone to critical illnesses such as heart attack, stroke, cancer, etc. – all of these diseases lead to heavy medical expenses which can also add financial distress to you and your loved ones. Since you are prone to making more claims, insurance companies charge a higher premium as you grow older. 

3. Hospitalization Increase

As we age, the chances of hospitalization increase compared to an earlier age. With rising hospital expenses comes a hefty medical bill that can burn a hole in your pocket. This is why you need a health insurance policy more than ever when you’re older and the premium you would be paying will be higher due to higher costs. 

4. Prone to Surgery 

As you get older, your bone density reduces, and your strength and stamina also reduce. There is a higher risk of requiring surgery to treat specific conditions, which is why the chances of older people getting hospitalized for surgeries are also higher. As surgeries are expensive, policy holders who are older and at greater risk for this are more likely to make a claim and thus charged a higher premium amount. 

Most insurance policies provide similar coverage across age groups.  However, for older people, the medical support requirement would be higher as they are more prone to fall ill or incur heavy medical expenses – this is why age is a very important factor to assess while buying a health insurance policy. The age factor is based on a statistically built way of assessing risk and therefore a higher premium rate is calculated keeping this in mind. 

The best way to navigate the premium amount and pay a lower premium is

  1. to buy health insurance when you’re younger as the probability of getting a lower premium is higher. 
  2. You can also research and calculate how much different insurance companies charge and make an informed choice. 

It’s always smart to think ahead, especially when it comes to health. Chola MS offers a Comprehensive Health Cover providing your healthcare benefits with a click of a button.