One of the most imperative things that anyone looking for insurance needs to know is the cost involved. Statistics indicate that Americans prefer to pay the more expensive premiums, which will offer them value by assuring them comprehensive medical coverage. Like other costs, the premium cost that insurance companies charge is affected by factors such as inflation, and thus, the premium rates vary from time to time. A vital fact to take into consideration is that to find the best health insurance, you need to use online reviews and look at reviews of online shops and insurance companies reviews. Avoid the negatively reviewed companies. In this article, we will have a look at factors that affect insurance premiums.
Factors affecting insurance premiums
Several factors affect the amount that you pay for health insurance premiums. Most of these factors are beyond our control. These factors include;
- Federal laws and state laws.
The country or state where you are purchasing your insurance cover always has laws that stipulate the amount that insurance companies should charge and what this amount should cover. These laws are meant to prevent insurance companies from exploiting consumers while also ensuring the rates are fair both for the consumer and the company.
- The size of your employer.
Employees in different companies pay different amounts for their insurance covers. In large companies, you find that insurance is cheaper as compared to small companies. It is right to say that your employer determines how much you pay for your premiums. Thus, by choosing your employer, you are choosing the amount you’ll pay for your premiums.
Another factor affecting the amount that you’ll pay for your premium is whether you pay the premium on your own or your employer does it on your behalf. It might be economical to buy your own premium in some organizations, yet in others, it might be favorable when your employer insures you. It all depends on your employer, and especially the size of your company. Always keep these factors in mind.
- Type of health insurance plan
Health insurance plans will vary from one plan to another. Some plans will cost more than others. The kind of plan you select will determine the amount you will pay as a premium. Depending on your affordability and the kind of coverage needed, select the most affordable plan.
Your age also determines the amount you pay for a certain premium. The older you are, the more you pay. In most insurance companies, you will find that aged individuals will pay up to three times more than younger individuals. The argument is that the chance of a 25 year old falling sick of certain illnesses such as heart conditions is less as compared to those of a 65 year old man. While there are exceptions, the general rule is that younger people tend to be charged fewer premiums than older persons.
Majority of health insurance premiums depend on gender. While this may seem strange, there are reasons for this. Medical research has proven that women tend to visit doctors more often, are more prone to chronic diseases, and take prescriptions more. Thus, women tend to be charged higher premiums than men.
- Family Medical History
Genes play a vital role in defining your personality as well as the overall structure of your life. Even a person’s emotional and physical health is highly affected by one’s family history. Suppose you have a family with a history of illnesses such as diabetes, cancer, or heart disease. In that case, health insurance companies tend to assume that you have a high probability of contracting these diseases. Thus, you will be charged higher premiums than it would for a family without a record of illnesses.
- Pre-existing condition
One’s medical history is a significant factor affecting insurance premiums. While selecting a policy, insurance companies require one to submit their health records. If you have had issues with your health, insurance companies can decline to offer you a policy, especially if they don’t cover the disease in your policy. This will mean that the policyholder will be required to bear this cost, which will increase the premiums that they pay.
In conclusion, you may have been wondering what affects the premiums that your health insurance charges. With this article, you have the various factors that affect the premiums. Thus, you are guided on how to go about choosing your health insurance based on the premiums you are ready to pay.