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Understanding Health Insurance Premiums: How Age Affects Your Costs

Several factors affect health insurance costs. Lifestyle choices, location and pre-existing diseases are some of those factors. But among them the most prominent factor that affects your health insurance policy cost is age. 

There are several reasons why age is the most prominent factor and here we will find out what those are. 

Why is Age a Determining Factor in Health Insurance Costs?

Health insurance premiums are based on your age because there's an increased risk for older people. A higher risk means a higher chance that an insurance company will have to pay a claim amount. Therefore, insurance companies charge higher for older people. Conversely, younger people are associated with lower risk hence lower premiums. 

To summarise, here's a list of reasons why age is a determining factor in health insurance costs: 

1. Higher risk

As you grow older, the chances of you contracting a sickness that needs hospitalisation are higher. This is natural since age weakens our bodies and their ability to counter diseases. Now a higher chance of hospitalisation associates you with a higher risk resulting in increased health insurance costs. 

2. Prevalence of pre-existing diseases

Like how you have a higher chance of contracting diseases as you grow older, the onset of pre-existing diseases is also likely at an older age. Pre-existing diseases, like high blood pressure, diabetes, cholesterol, etc., increase your chance of hospitalisation and if not hospitalisation then more doctor visits and medicinal treatments. All these associate you with a high risk, therefore, increasing your health insurance premiums. 

3. Greater risk of critical illnesses

Another risk you face as you grow older is the risk of critical illnesses. This includes diseases like cancer, heart attack, kidney failure, etc. Such diseases require extensive care and are expensive to treat. So your health insurance plans will cost more at older age since the risk of critical illnesses is higher. 

4. Rising healthcare costs

All over the world, and especially in India, the cost of healthcare is rising every year. So, the cost of hospitalisation, when you're 38 years old, will be much higher than when you were 35 years. This medical inflation results in your health insurance costs increasing every year which also coincides with your advancing age. 

Other Factors Affecting Health Insurance Premiums

Age is not the only factor that affects health insurance costs. There are other factors at play when your premium amount is generated. Here's a list of other factors affecting your health insurance premiums: 

1. Life choices

Your lifestyle has a direct impact on your health insurance premiums. For example, whether your smoke or not alters your premium amount because smokers are associated with a higher risk of disease as compared to non-smokers. In some cases, even your Body Mass Index (BMI) can affect your health insurance premium. If you have a healthy BMI then you'll get lower premiums and the opposite if you have a sub-optimal BMI. 

2. Your profession

What job you work in at the time of buying your health insurance policy also affects your premium amount. If you're someone who works in a high-risk job like factories or oil rigs then your health insurance policy cost will be higher. On the other hand, if you work a desk job then the risk associated with you is lower resulting in reduced premiums. 

3. Where you live

Another important factor that decides your final premium amount is your geographical location. This is because healthcare costs differ from region to region. So, if you live in a metropolitan city then your health insurance plans will cost higher since the healthcare prices are higher in cities. And contrary to that, the premiums are lower in Tier-2 and Tier-3 cities. 

4. The type of health insurance plan

Health insurance premiums are also tied to the type of plan you choose. Policies with fewer benefits and a lower Sum Insured will cost lower. However, a health insurance policy with more base benefits and a higher Sum Insured will cost more. Also, any add-ons you select will raise premiums. 


Age is a major determining factor in your health insurance premiums because with age comes a host of risks. These include a higher chance of catching a disease and lifestyle diseases like diabetes, high blood pressure etc. And as you grow older, medical costs also go up directly affecting health insurance costs. 

Therefore, it's best for you to get a health insurance plan when you're young, like in your 20s. But even if you missed out on getting a health insurance plan at that time you can still get one now and avoid financial distress and get treatment for potential life-threatening illnesses.