What Factors would Impact Your Premium for Family Health Insurance?

Purchasing a health plan has become an important financial decision for all of us. It turns our savior whenever we are faced with an exorbitant medical bill. However, when you search health plans offered by different insurance plan providers; you find the quoted premium amount that you need to pay different even though the variation is not too vast. There are various considerations taken by the insurance company before they quote you the payable premium amount. Here, we list out a few of the factors considered by them that impact the premium amount you must pay for your family health insurance. Read on:

  1. Age

Age is an important factor while considering the premium amount. We know for individual policies; lower age means lower premium amount. But if you are purchasing a group policy, the average age of all the members of the group is taken as the age to be considered. However, if you have a member of the high-risk band in the group i.e. above 45 years of age; then the premium amount would rise accordingly.

  1. Size of the group

This is another major consideration that goes hand in hand with the first consideration. It goes without saying that the premium amount of a family floater is less than if you purchased individual health policy. Simultaneously, a family floater of two will incur a lower premium than a family floater of four.

  • Location of residence

Many do not know but the geographical location of the insured also impacts the premium amount. For instance, people living in metropolitan cities are not only more prone to health issues but they also need to bear a higher medical cost. Hence the premium amount for a metropolitan city would be more compared to another non-metropolitan city.

Another factor taken into consideration is city-based costing. For instance, the cost of treatment in cities like Mumbai or Delhi is far more than in cities like Bihar, Orissa, Bhubaneshwar, etc. and thus the premium amount would vary accordingly.

  1. Medical history

The medical history of the family also plays a significant part in determining the premium amount of the family floater.  A poor medical history will attract a higher premium as compared to a healthy history.

  1. Tobacoo/Alcohol consumption

Alcohol and especially tobacco consumption are highly detrimental to health. They can cause critical diseases like cancer, kidney failure, etc. Even if you have quit the consumption of tobacco a few years back, you would still be charged a higher premium as the risk of the disease takes time to abate. Few health plans offer coverage for smoking-cessation products like nicotine gums, nicotine patches, etc. if recommended by the doctor.

  1. Pre-existing illness

If any member of the family floater has a pre-existing disease, then the premium amount is likely to spike as the risk of disease increases. Often pre-existing diseases are also covered after a waiting period or with certain stipulations.

  1. Sum insured

The amount of cover you are seeking also determines the premium amount. A higher sum insured would attract a higher premium. The sum insured that you select would depend on the size and age of the group and what extent of cover would be adequate. The need must be assessed accurately before deciding on the sum assured while keeping in mind the premium amount that you can pay.

  1. Sub-limits attached

Every policy has sub-limits attached. This includes various restrictions and benefits. Few restrictions include a maximum amount of room rent, doctor’s fees, nursing fees, etc. The other considerations here is the deductible and copayment. The higher is any or both of this clause, the lower is the premium payable amount.

  1. Available discounts

Insurance company tends to offer discounts and promotion offers from time to time. You get a no-claim bonus if you have not made any claim in the past year. A clean track record also attracts terrific discounts from other insurance companies who entice you to port your policy to their brand. A healthy lifestyle, gender, marital status, etc. are few factors that affect the extent of the discount that you might receive. You also get an attractive discount if you opt for a bulk policy for two or three years instead of a single year.

  1. Additional covers

Apart from the base policy, you have the option to add a few add-ons covers like maternity benefits, OPD benefits, critical illness cover, etc. Depending on the add-ons, the premium amount is likely to increase.

  1. Insurance track

Purchasing a health policy for the first time is likely to attract a higher premium. But if you already have an existing policy, your payable premium is likely to be more moderate.


Plenty of considerations go into deciding the premium amount for any family health plan. Thankfully, you have plenty of online premium calculators available which give you an approximate premium amount after you key in the required information. Else the insurance agents help you with all the details.