Insurance providers use the information you provide in your initial application to formulate your risk profile. They then compare this profile to their own benchmark for risk profiles (established by conducting extensive research and using historic data) and decide whether or not you qualify to take out one of their health insurance products. If you do qualify they then come up with a tailor-made quote based upon a number of different factors. This is why two individuals who purchase health insurance from the same company can expect to pay very different premiums.
Most insurers start by working out your body mass index (BMI). If you have a high BMI then your premiums are likely to be significantly more expensive as individuals with a high BMI are more likely to develop illnesses such as high blood pressure, sleep apnea and diabetes, and also to experience problems with their heart and joints. In addition, treatment for common conditions can also be more complex, and thus more costly, for example, pregnancy could carry a greater amount of risk and require more specialized treatment.
Gender also plays a role in determining the cost of your premiums. Women tend to pay more for health insurance than men as they are statistically more likely to visit the doctor, to suffer from some chronic diseases, and to take prescription medication. If they are of childbearing age then this can also increase premiums as childbirth and both pre and post-natal care can be incredibly expensive.
Your age is an important factor with regard to the cost of your premiums. As a general rule of thumb, the younger you are, the lower your premiums. This is because young people are less likely to visit the doctor, and experience fewer health problems than older individuals. However, they are statistically more likely to be involved in accidents and experience serious injuries as a result.
If you smoke then you can expect to pay more for your health insurance, even if you have stopped smoking within the last few years. Infact, some insurance providers will refuse to cover you at all if you are a smoker. The reason that insurers will charge you more even if you are an ex-smoker is that some studies have revealed that even former smokers have a higher risk of developing cancer and other diseases associated with tobacco use, and it can take many years after you have stopped smoking for these risks of lessen. Many health insurance plans provide cover for products designed to help you quit the habit, including nicotine patches and nicotine gum, if they are prescribed by a doctor.
When you apply for health insurance your insurer will ask you about your family history. If you have immediate relatives who have been diagnosed with, for example, cancer, or heart disease, you may be charged more for your premiums. They will also ask you about any pre-existing medical conditions and factor the cost of treating these conditions into your premiums. Some insurers may even decline to offer health insurance to people with certain pre-existing medical conditions, or simply exclude these conditions from the cover they offer.
Your lifestyle will also have some bearing on the price of your premiums. Married couples have been found to be generally healthier than singles, and the health benefits have been shown to be even greater for men. Your occupation will also be taken into account by your insurance provider when calculating your premium. If you are regularly exposed to radiation or hazardous chemicals, or if your profession has high injury rates your premiums will be much higher than those with jobs deemed to pose less of a risk. Conversely, premiums are also likely to be higher if the work you do is very sedentary as this could put you more at risk of developing cardiovascular disease. In addition, if you regularly travel overseas with your job then you are also more likely to be charged more for your health insurance.
Perhaps surprisingly, where you live can also impact upon the cost of your health insurance. If statistics show that people who live in the same area are less healthy than those who live in other parts of the country you will unfortunately be asked to pay more. This may be due to a lack of healthy food options (perhaps due to lower incomes), a better climate, or a cultural dislike for exercise. Insurance providers also have to comply with local legislation; if it costs them less to provide cover in the area in which you live then the savings will be passed on to you.
If you have not had health insurance before, or have had a period of time where you have been without it, you may also be charged more. Insurance providers suspect that you may be in need of medical attention if you have not received regular checkups, or that you have been waiting to take out insurance so that you can receive treatment for a number of medical conditions.
Although health insurance premiums are based upon a number of different factors there are some steps that you can take to ensure that your premiums are kept to a minimum. It is important to take regular exercise, keep your weight between healthy parameters, and to avoid smoking. By taking some sensible precautions you can make sure that your health insurance remains affordable, and hopefully live a long and healthy life.