Healthcare costs in India are expected to increase by 13% this year (2025). It directly impacts mediclaim insurance policy premiums as the insurers now have to cover the higher expense of medical treatments.
While the above-mentioned factor is beyond our control, what we can do is make ourselves aware of the other controlling factors that are well within our reach to navigate health insurance premiums better.
What is a Mediclaim Insurance Policy Premium?
A medical insurance policy is only as good as what it covers when you actually need it — and the devil lives in the fine print. Before buying, check three things: the claim settlement ratio of the insurer (anything above 95% is reassuring), the number of network hospitals in your city, and whether the policy covers home healthcare and teleconsultation. India’s healthcare inflation runs at approximately 14% annually, which means a ₹5 lakh sum insured today will feel like ₹3 lakh in purchasing power within five years. A good medical insurance policy should either include a guaranteed sum insured increase feature or an annual no-claim bonus that meaningfully raises your cover. Also confirm whether the plan covers AYUSH treatments — mandated by IRDAI — since these provide additional treatment options. The best medical insurance policy is one that grows with your family and does not leave you underinsured five years from the purchase date.
In simple terms, a mediclaim insurance policy premium is the amount that you pay to the insurer to maintain your coverage. You can choose from monthly, quarterly, or half-yearly payment frequencies to pay your premiums (which differ according to the insurer and type of policies).
8 Factors That Determine Mediclaim Insurance Policy Premium
Age
Age is one of the most important factors that determines your health insurance premium. Most health insurance providers follow a general rule of thumb, which is that the higher the age, the higher the premium.
It is because older people suffer more from illnesses than younger people.
Geographical Location
Mediclaim insurance policy premium is also majorly influenced by the location where you reside. Premiums are higher in metropolitan cities than in small towns.
It is because the costs of treatment are higher in metropolitan cities than in smaller towns. Additionally, people residing in bigger cities are more prone to an unhealthy lifestyle and hence bigger health problems.
Lifestyle
The lifestyle is yet another factor that plays a role in determining the mediclaim insurance premium. The lifestyles we lead influence our health a lot. Having active habits of smoking and drinking can pose health threats. The insurers take note of these habits during underwriting and deem such individuals as high-risk.
Getting a ‘high-risk individual’ tag by an insurer leads to higher premiums.
Medical History
If you have a pre-existing disease, your premiums will be higher. However, if you have a clean health history without any records of serious illnesses, your premiums will be comparatively low.
In this instance, the health insurance premium calculation is based on the risk of particular diseases.
Gender
There are different instances where each gender pays a higher mediclaim insurance policy premium. For example, men generally get charged a higher premium as they are more prone to getting affected with serious illnesses like heart disease, stroke, etc.
On the other hand, women get charged more when they are in their 20s and 30s because this is the time when they are more likely to file maternity claims.
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Co-Payment
Having a co-pay feature in health insurance policies leads to lower premiums. It is generally recommended not to get a health insurance policy with a co-payment policy, as that leads to higher out-of-pocket costs.
Coverage Limits
Coverage limit refers to the total sum of insurance that your health insurance policy provides. The higher the coverage, the higher the premium that you will have to pay for it. For instance, if you get a mediclaim insurance policy for family, it will lead to higher premiums as opposed to an individual insurance policy.
Riders/Add-Ons
Getting riders or add-ons to your health insurance policy will incur an extra premium. The more riders and add-ons that you get, the higher the overall premium.
Top 5 Tips to Reduce Mediclaim Insurance Premium
Compare Different Plans
A great practice to determine the best mediclaim insurance policy that is ideal for your needs is comparing different plans from different health insurance providers. You can either do it manually, or there are also various comparison tools that can help you do this research.
Maintain a Prolonged Coverage
Having gaps in health insurance coverage can lead to higher premiums. Instead, prolonged health insurance coverage is more ideal. This will lead to much lower premiums as compared to when you reapply.
Maintain a Healthy Lifestyle
There are many insurers who offer discounts on health insurance for people who have a healthy lifestyle. Insurers do this assessment during the time of underwriting.
Before finalising any plan, spend a few minutes on a health insurance premium calculator — it removes the guesswork from budgeting. These tools are available free on most insurer websites and aggregator platforms. Enter the ages of all members you want to cover, the city you live in, and the sum insured you need, and the health insurance premium calculator instantly generates comparative quotes across plans. Adding a critical illness rider or OPD benefit shows you exactly how much each add-on costs. Many people are surprised to find that jumping from ₹10 lakh to ₹25 lakh cover adds only a small incremental premium. Run the health insurance premium calculator at every renewal too — not just when you first buy — because your age, city, and family size all affect the math.
Final Words
Getting to know about the factors that affect your mediclaim insurance policy is an essential step that can help determine the right coverage for you. It will aid you in better financial budgeting concerning your future healthcare needs.
