Copyright thelogicalindian
Health insurance is an essential part of today’s India due to rising medical costs and the increasing risk of lifestyle diseases. Having a proper knowledge of the health insurance cost and other elements is crucial to secure affordable yet comprehensive coverage. In this blog, we will discuss the major factors that affect the overall costs of health insurance in India and current trends. What are the Cost Elements of a Health Insurance Policy? Let us explore the key elements of an insurance policy that influence the overall health insurance cost in India. These include: What are the Key Factors that affect the Overall Health Insurance Cost in India? These are some of the factors that affect the health insurance cost in India. Let us discuss them in detail: Premiums generally increase with age, as older individuals possess a high risk of illnesses. Younger individuals are generally healthy and are less likely to file large claims. For example, in 2025, a healthy individual aged 23-30 might pay a monthly premium of Rs. 500 to Rs. 1,000 for a Rs. 5 to Rs. 10 lakh coverage option. However, a senior citizen over 60 could pay Rs. 3,000 to Rs. 5,000 per month for the similar coverage. 2. Sum Insured Higher coverage provides more financial protection but also increases the insurer’s liability within the health insurance cost. This results in a higher premium in the long term of the policy tenure. A policy offering Rs. 20 lakhs in coverage will be more expensive than one with a Rs. 5 lakh limit. 3. Medical History Pre-existing conditions like diabetes or heart conditions can lead to higher premiums. Insurers view individuals with PEDs as higher-risk candidates and may impose additional premiums. It can reduce the waiting periods depending on the terms and conditions of the particular policy, before covering these conditions. 4. Lifestyle Habits such as smoking, alcohol consumption, and an unhealthy body mass index (BMI) increase the premium amount. These are some common problems in today’s India, leading to a rise in lifestyle diseases like obesity and hypertension. These habits can increase the risk of serious health issues, which raises the likelihood of filing a claim. 5. Type of Plan The type of plan directly impacts the premium. A medical insurance for family covers multiple family members under a single policy, which is generally cost-effective than individual policies. Comprehensive plans with extensive coverage may include benefits like maternity or critical illness cover but have higher premiums. 6. Add-ons and Riders Optional benefits like maternity, critical illness, or hospital cash riders can increase the overall premium amount of your chosen health insurance policy. Thus, it is recommended to choose a plan that will balance your budget and benefits. 7. Geographical Location Premiums may vary depending on your city of residence. Healthcare costs are higher in Tier 1 metropolitan cities like Delhi, Mumbai, and Bengaluru can result in higher premiums for residents. In contrast, Tier 2 and Tier 3 cities have lower healthcare costs and, therefore, lower premiums. 8. Co-Payment Clause Your willingness to share a portion of the medical costs can lower your premium. Opting for a higher deductible will lower your premium. A policy with a higher co-payment clause typically has a lower premium. Impact of Recent Changes From September 2025, premiums for health insurance and add-ons are exempted from GST, reducing the overall cost burden on policyholders. This change adds to the affordability of the comprehensive plan with enhanced features. Final Words Various plans influence the overall health insurance cost, including age, lifestyle, medical history, location, and policy features. Policyholders must carefully evaluate these elements in relation to their health requirements. Understanding these cost elements empowers individuals to make prudent decisions, securing optimal protection without paying unnecessarily high premiums.
