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A health insurance policy takes care of you and your family during any medical crisis. It ensures that your financial plans do not get derailed because of heavy hospitalisation bills. But do you know that while approving your health insurance proposal, the underwriter of the insurance company takes into consideration several criteria to work out the premium charges?

Here is a list of factors that determine health insurance premium rates:

Medical history: The insurer often asks individuals to go through a series of medical tests in order to ensure that a person is healthy at the time of taking the policy. The healthy person is charged according to the standard premium rates of the company. However, if the person is found unfit or unhealthy then the insurer may charge a higher premium because of a higher chance of falling sick. The insurer may also reject the policy in case there are high health risks.

Smoking: Premium rates are higher for smokers compared to non-smokers for the same amount of sum insured. People tend to give false health declarations at the time of buying the policy but hiding material facts can lead to claim rejection at the time of filing claims.

Body Mass Index (BMI): Eating junk food regularly and physical inactivity can lead to overweight issues which in turn increases the risk of diabetes, heart disorders, among other illnesses. It is therefore at the time of buying insurance weight is considered to be one of the important parameters for assessing the health conditions of the customer. Insurers may charge higher premiums if the policyholder is overweight or underweight as it carries a higher risk of falling sick.

Age: The older the person the higher will be health insurance premium rates. This is because the chances of getting sick are higher when the person grows old compared to a young person.

Location: Many insurers also offer premium rates based on the city you live in as the cost of treatment is low in smaller towns and cities compared to big cities. Based on the town one lives, the insurance company may charge lower rates.

Copayment: Co-payment is the feature in which you pay a certain percentage of hospital bills from your pocket while the rest is paid by the insurance company. By opting for co-pay you can substantially reduce the premium rates of your policy. The rule says the higher the co-pay the lower the premium will be in a similar proportion. Hence, if the policyholder opts for 20% co-pay then the premium rates will also go down by 20%.