The first step to getting the right medical coverage when it comes to yourself and your family is to understand the premiums for health insurance. Be it the lowest health insurance premiums in India, a high coverage plan or the advantages of a health insurance with the return of premiums in India, a better understanding of the premiums enables you to make better, well-informed choices with a better value in India.
Health insurance premiums are very important in long-term financial planning, particularly with the increase in costs of medical care. This is a step-by-step guide to the meaning of premium, how it works, the average health insurance premium in India, and some money-saving tips- besides exploring the cost-effectiveness of health insurance plans offered by ManipalCigna.
Meaning of Premium in Health Insurance
Premium in health insurance refers to the sum of money you pay to your health insurance company in order to maintain your health plan. It is a recurring payment, monthly, quarterly, half-yearly, or annually, depending on the insurer’s structure and your preference.
In simple terms, the premium is the “price” of your health insurance policy. When you pay the premium:
- Your health plan remains valid
- Your coverage benefits remain available
- You stay financially protected during medical emergencies
If you fail to pay your premium within the grace period, the policy may lapse, leaving you without coverage.
Thus, premiums ensure continuous access to hospitalisation benefits, cashless treatment, and protection against rising medical expenses.
How Does a Health Insurance Premium Work?
The mechanism of a health insurance premium is straightforward but influenced by multiple variables.
When you purchase a health policy:
- The insurer evaluates your risk profile
- Based on that, they compute your premium
- You pay the premium to activate and continue your policy
- In return, the insurer promises to cover medical expenses as per policy terms
The premium you pay depends on the coverage amount (sum insured), plan type, add-ons chosen, and your personal risk factors. Insurers may reassess premiums at renewal based on:
- Age-band changes
- Claims history
- Medical inflation
- Any policy upgrades
A higher premium usually means broader coverage, additional features, and enhanced financial protection.
Factors Affecting Health Insurance Premium
Several important factors determine the health insurance premium in India. Understanding them helps you choose the most cost-effective plan.
- Age: Younger individuals usually enjoy lower premiums because they pose a lower health risk. Premiums rise significantly after age 45.
- Medical History: Pre-existing illnesses such as diabetes, hypertension, asthma, or thyroid issues may increase your annual premium.
- Lifestyle Choices: Habits like smoking, alcohol consumption, or a sedentary lifestyle lead to higher premiums due to increased health risks.
- Type of Plan: Individual plans, family floater plans, senior citizen plans, and critical illness plans have different premium structures.
- Sum Insured: Higher coverage leads to higher premiums. For example, a ₹10 lakh plan will cost more than a ₹5 lakh plan.
- Add-Ons and Riders: Features like maternity cover, OPD coverage, critical illness riders, and restoration benefits add to the premium amount.
- Gender & Location: Some insurers calculate premiums differently based on gender. Urban areas usually have slightly higher premiums due to advanced healthcare costs.
- Body Mass Index (BMI): A high BMI can attract loading charges, increasing your premium.
- Copay and Deductible: Plans with higher deductibles or copay options offer lower premiums (more details later in the blog).
Average Health Insurance Premium in India
The average health insurance premium in India varies widely based on age, coverage, and policy type. Here is a general idea:
1. Individuals (Age 25–35)
- ₹5 lakh coverage: ₹6,000–₹10,000 annually
- ₹10 lakh coverage: ₹9,000–₹14,000 annually
2. Family Floater (2 Adults + 1 Child)
- ₹5 lakh coverage: ₹13,000–₹20,000 annually
- ₹10 lakh coverage: ₹18,000–₹30,000 annually
3. Senior Citizens (Age 60+)
- ₹5 lakh coverage: ₹25,000–₹45,000 annually
- ₹10 lakh coverage: ₹40,000–₹70,000 annually
4. High-Coverage Plans (₹1 Crore SI)
- Usually ₹12,000–₹30,000 for healthy young adults
- Can go up to ₹60,000–₹1 lakh for older adults
Remember, these are average figures. Actual premiums differ between insurers, health profiles, and plan features.
Difference Between Premium and Deductible
One of the most important questions customers ask is the difference between premium and deductible in health insurance.
Here’s a simple breakdown:
Premium |
Deductible |
The fixed amount you pay to keep your health policy active. |
The fixed amount you must pay out-of-pocket before the insurer begins coverage. |
Paid yearly, quarterly, or monthly. |
Paid only when you make a claim. |
Higher premiums = more features and lower deductibles. |
Higher deductibles = lower premiums. |
Not related to claim frequency. |
Directly affects your claim amount. |
A deductible is an excellent option for lowering premiums, especially if you are young or expect fewer claims.
Health Insurance with Return of Premium in India
Some customers prefer health insurance with return of premium in India, where they get back a portion, or all of the premiums paid if no claims are made during the policy term.
This type of plan is similar to a “no-claim money-back policy.”
Benefits of Return-of-Premium Plans:
- Premium refund at maturity
- Encourages long-term policy holding
- Ideal for people who want financial value even without claims
- Works well for families with stable health conditions
Drawbacks:
- Higher premiums than standard health plans
- May have locked-in tenure (like 5 or 10 years)
- Refund happens only if no claims are made
Return-of-premium plans are suitable for financially disciplined individuals who want both protection and savings.
Low-Premium Health Insurance Policies in India
If you're looking for an affordable and low-premium health insurance policy in India, here are common options:
- Basic Hospitalisation Plans: These provide essential coverage and low premiums.
- Arogya or Standard Plans: Designed for affordability and simplicity with limited features.
- High Deductible Plans: Premium is low because you agree to pay a higher deductible.
- Young Adult Policies: Plans specifically tailored for individuals aged 18–35.
- Employee Health Insurance: If your employer provides insurance, personal plans can be bought with minimum add-ons, reducing the premium.
- Wellness-Based Discount Plans: Some insurers offer lower premiums based on:
- Fitness levels
- Steps tracked
- Health assessments
- Healthy lifestyle behaviour
These policies offer good protection without straining your budget.
Tips to Reduce Your Health Insurance Premium
To manage your health insurance premium in India, here are practical ways to save money:
- Buy Early: Premiums are significantly lower when you start young.
- Choose Floater Plans for Families: Family floaters cost less than buying individual policies for each member.
- Opt for High Deductible: If you’re healthy, a high deductible lowers your premium.
- Avoid Unnecessary Add-ons: Only buy riders you truly need.
- Maintain a Healthy Lifestyle: Avoiding smoking or excessive alcohol can save you money over time.
- Compare Plans Annually: Insurance needs and premiums change-don’t renew blindly.
- Use Wellness Benefits: Insurers that offer healthy behaviour rewards often provide premium discounts.
- Choose Long-Term Policies: Two- or three-year policy terms usually come with discounted premiums.
ManipalCigna’s Affordable Health Insurance Plans
ManipalCigna is known for offering flexible and affordable health insurance solutions that cater to varied customer needs, including individuals, families, senior citizens, and high-coverage seekers.
Here’s how ManipalCigna ensures cost-effective premiums:
- Wide Range of Sum Insured Options: Choose from affordable ₹3 lakh plans to high-value ₹3 crore plans.
- Plans for Every Budget: Their Sarvah suite-Sarvah Pratham, Sarvah Uttam, and Sarvah Param-offers options for people seeking:
- Low premiums
- Mid-range coverage
- High-end features
- Wellness-Linked Rewards: Healthy lifestyle behaviour can reduce future premiums.
- Pre-Existing Disease Options: Shorter waiting periods help reduce long-term financial risk.
- Multiple Discounts
- Family discounts
- Early renewal discounts
- Multi-year policy savings
ManipalCigna stands out for balancing affordability with strong protection, making it ideal for customers seeking the lowest health insurance premiums in India without compromising quality.
Conclusion
The premium in health insurance plays a vital role in determining your long-term financial stability and access to quality healthcare. Whether you prioritise affordable plans, high coverage, or special benefits like health insurance with return of premium in India, understanding how premiums work empowers you to choose better and save more.
As medical inflation rises, selecting the right health policy becomes even more important. Look beyond just low premiums-evaluate coverage, deductibles, add-ons, and your family’s health needs. Affordable policies are important, but value-driven, comprehensive protection matters even more.
FAQs on Health Insurance Premium
What is meant by premium in health insurance?
A premium is the amount you pay periodically to keep your health insurance policy active. It ensures continuous coverage for hospitalisation, treatment, and other health benefits.
How is a health insurance premium calculated?
Premiums are calculated based on age, sum insured, medical history, lifestyle habits, add-ons, BMI, location, and the type of plan you select.
What factors influence the premium amount?
Key factors include age, health condition, smoking habits, pre-existing illnesses, plan type, sum insured, optional riders, and claim history.
What is the difference between a premium and a deductible in health insurance?
Premium is what you pay to maintain your policy. A deductible is the amount you pay out of pocket before insurance coverage begins. A higher deductible usually reduces your premium.
What is a return of premium in health insurance?
This plan refunds part or all of your premium if you do not make a claim during the policy term. It combines protection with savings, but premiums are higher.
