Health insurance has become a necessity today, as sedentary and stressful lifestyles have given rise to many diseases. It offers financial security during medical emergencies, which is very important. However, when choosing a health insurance policy, many individuals are stuck between an alluring low premium and the security of wide coverage.
So, let us unveil the meaning of both these nuances and understand which one holds more significance so you can make the right choice.
Health Insurance Premium Vs Coverage
Health Insurance Premium
Premium is the amount that you pay to the insurance company to receive the benefits of the medical insurance. It is the cost of your insurance plan that can be paid monthly, yearly, or quarterly. You can use a health insurance premium calculator to find out the premium beforehand and explore various online options available.
To keep the policy active and receive financial assistance for medical emergencies, you must pay the premium regularly. Non-payment of the premium causes your policy to lapse. In case of a medical emergency, you will not be eligible to receive any financial coverage if you fail to pay your premiums.
It is crucial to understand that the premium for health insurance is not standard for everyone. In fact, it depends on certain factors, such as the age of the insured, type of plan, location, coverage extent, health condition, etc.
The health insurance premium calculation can be understood using the following table.
| Factors | Effect on Premium |
| Age of the Insured | The older an individual is, the higher the premium of the medical insurance is as health problems increase with age. |
| Location | Depending on the geographic location, the premium amount may vary. |
| Coverage | Comprehensive insurance plans have higher premiums compared to the base plans. |
| Health Condition | Those with critical illnesses or pre-existing diseases may pay a higher premium. |
Health Coverage
Coverage refers to the scope of services and health protection that an insured is entitled to receive under a particular insurance plan. It is the total sum of money (sum insured) that the insurance company will pay if you face a medical emergency and make a claim. The coverage of your insurance plan depends on the type of plan and add-ons that you pick.
| Parameter | Coverage |
| Type of insurance plan | Insurance companies offer plans with varying coverage. For example, a basic plan has lesser coverage than a comprehensive or premium plan. |
| Add-ons/Riders | The coverage of your insurance plan also depends on the add-ons that you include. More add-ons mean wider coverage. |
While there is no ideal coverage value that one must have, it is recommended to opt for coverage of at least 5,00,000 or 50% of your annual income.
Premium or Coverage: Which One is More Important?
Experts suggest that both premium and coverage are crucial factors that help you choose the right medical insurance. However, it is best to balance both these factors wisely. Since the primary purpose of insurance is to provide you protection in case of medical emergencies, it goes without saying that emphasis must be placed on health coverage.
Choosing a policy with a lower insurance premium may result in insufficient coverage, which defeats the purpose of buying health insurance. Low-cost insurance can also cause financial stress as you have to shell out more money from your pocket.
Thus, it is best to choose a plan that offers wide coverage and yet the premium does not break the bank, such as the insurance plans offered by TATA AIG. It will ensure that all your medical needs are met without any compromise.
Choosing the Right Health Coverage
Consider the following while choosing the right coverage for your policy.
- Medical Needs- Consider the medical history, pre-existing conditions, etc., and opt for coverage to include them.
- Family Members- If you want to take a family floater plan, consider the number of members and their health requirements.
- Future Requirements- Keep in mind the future health needs that you may have, such as medical surgery, family planning, etc.
- Medical Inflation- Choose a coverage that can help you beat medical inflation and meet your future requirements.
Summary
We can conclude that policy coverage is more crucial than insurance premiums when it comes to buying a health insurance policy. However, while choosing the coverage, one must pay attention to the medical needs, family size, inflation and other factors.
One must place more importance on insurance coverage and choose a plan which is affordable yet does not compromise the coverage.
