Designed to help people maintain their health and remain financially sound should a major illness arise, the realm of health insurance sure has changed over the years. However, the concept remains the same: Policyholders pay a premium amount on a set schedule in exchange for certain health coverage benefits after any deductible amounts are met at the patient’s expense.
What Exactly is an Insurance Premium?
In short, a premium is the total price of an insurance policy. This is typically an amount calculated after an assessment of several factors about the policyholder are factored in along with the base price of the policy.
Factors that help determine one’s health insurance premium include:
- Age and location of applicant
- Number of policy participants
- Type of coverage ranging from basic to premium policies
- Health history and pre-existing conditions
- Whether it is a company sponsored policy that qualifies for group discounts.
How to Pay Less for Health Insurance
Essentially, the healthier you are and the younger you are, the less your health insurance premiums will be. You can help lower costs of policies through minimizing risk factors. Risk factors that are red flags that typically increase premiums include:
- Heavy Drinking
- Chronic Illnesses
- Hazardous Jobs
- Poor Credit Score
- Insurance Coverage Gaps
Insurance premiums may go up and down due to a number of factors, including a policy holders change in status concerning these issues.
Why Insurance Premiums Fluctuate
Even if no factors beyond your age and location change, health insurance premiums may rise and fall periodically. Increases tend to follow periods in which insurers have had more claims than losses they had anticipated. It will be rare to see rates go down unless you start qualifying for additional discounts after years of being a customer.