How Early Purchase Reduces Lifetime Premium?

When you purchase a health insurance policy at a younger age, you can get lower premiums. A lifetime premium is a fixed amount which you must pay every month or year. Let us understand how buying a health insurance policy in your 20s can reduce your premium, rather than choosing it at an older age.

What is a Lifetime Premium in Health Insurance?

A lifetime premium in health insurance is a fixed amount that customers have to pay to the insurance provider every month, quarter, or year to maintain the coverage. It is determined by your age, gender, type of health insurance policy, location, and other factors.

How Does Early Purchase Reduce Lifetime Premium in Health Insurance?

Your lifetime premium increases with your age. The reason is, just like you grow older, your chances of filing a claim increase because of health issues. This is why people aged 40 to 50 are charged with higher premiums compared to those who are in their 20s.

For instance, person A and person B purchase health insurance for a sum insured of Rs. 1 lakh at the ages of 25 and 35, respectively. Person A has to pay an annual premium of ₹2,000 to ₹2,500, and Person B has to pay ₹3,100 to ₹3,500.

Health insurance companies consider young people as a lower risk. The reason is that they have lower chances of getting affected by a disease or medical condition. Buying a health insurance policy in your 20s or early 30s, you can pay lower premiums to get an extensive coverage for your expenses, OPD expenses, maternity benefits, and so on.

Other Tips to Reduce Health Insurance Premiums

While early purchase of health insurance reduces your premium amount, there are other ways you can reduce it:

1. Buy a Family Floater Plan

You should buy a family floater plan instead of buying separate plans for your family members. This plan covers your family members under a single policy with the assumption that each of them will not get ill at the same time.

2. Opting for a Lower Sum Insured

If you choose a lower sum insured amount, your premium will also reduce. Your sum insured is the maximum amount the insurance company will pay you for your medical expenses.

3. Maintain a Healthy Lifestyle

Maintaining a healthy lifestyle is as important as buying health insurance at a young age. Individuals with good health will get health insurance with a lower premium. For example, if you have diabetes, you have to pay more for your health insurance policy than people who have a healthy lifestyle.

4. Choose Co-Payment and Deductibles

Choosing the co-payment or deductible option can also reduce your health insurance premium significantly. Co-payment is a portion of your claim amount which you have agreed to pay out-of-pocket. Additionally, deductibles are fixed amounts you have to pay before the insurance company covers the rest of the healthcare expenses.

Final Thought

Buying a health insurance policy is more beneficial at a younger age. Instead of purchasing a policy when it is urgent, you must purchase it when you are in your 20s and ensure your financial protection and peace of mind. To get lower premiums, you must also choose co-payments and deductibles and opt for a lower sum insured amount.