The Impact of Lifestyle Factors on your Health Insurance Coverage

The Impact of Lifestyle Factors on your Health Insurance Coverage

Lifestyle factors play a crucial role while buying a health insurance policy. The insurance company verifies and seeks several answers regarding the lifestyle of the insurance buyer. The buyer is expected to answer every question accurately and in good faith to buy the insurance policy. In case of a wrong answer or misleading fact, the insurance company has the discretion to either reject the application for health insurance or deny the compensation in case of a claim. Therefore, the lifestyle of an individual has a significant role to play in the acceptance or rejection of an insurance application.

Impact of Lifestyle Factors on Health Insurance Plans

Lifestyle and BMI

While assessing the application for a health insurance policy, the insurance company comprehends whether the applicant is living an active lifestyle or a sedentary lifestyle. An individual living an active lifestyle stays fit and fine. These kinds of individuals perform yoga and do healthy exercises. They also indulge in running, walking, weightlifting, sports, dance, physical training and other activities. The insurance company offers reward points to the policyholders enjoying a healthy and active lifestyle. Such points can be redeemed by the policyholders in order to avail medicines, diagnostic tests, doctor’s consultations, discounts on premiums or renewal of premiums, etc.

At the same time, an individual living a sedentary lifestyle is expected to pay a higher premium in order to buy a health insurance policy. An individual living a healthy lifestyle is not likely to get captivated with any disease. However, an inactive person is prone to health issues and diseases. Therefore, such a person is bound to pay a higher premium.

Let us understand it with the following examples.

  • If the BMI (Body Mass Index) of a policy buyer is up to a certain range, the insurance company is likely to charge a normal premium from such an individual as it charges from others.
  • However, if the BMI of an individual is higher than the normal range, such an individual is prone to many issues pertaining to his health. Hence, he is expected to pay a higher premium in order to buy the health insurance policy.
  • At the same time, if the BMI of an individual is substantially higher than the normal range, the insurance company may reject his application for a health insurance policy as such an individual is prone to various health-related issues and diseases. Providing insurance policies to such individuals may lead to severe losses and setbacks for the insurance company. Hence, such applications are bound to be rejected by the insurance company.

The insurance company may also evaluate other factors while considering the health insurance application. Such factors include the sleep hours of the policy buyers. It may also include whether the individual is active in recreational activities.

Habits of Individuals

The insurance company charges different premium rates for a smoker and non-smokers. If an individual smokes, he is expected to pay a higher premium as such an individual is prone to higher risks. The insurance company shall ask such an individual how many cigarettes he smokes in a day. Similarly, in the case of alcohol, the insurance company shall ask how much alcohol an insurance buyer consumes in a day. The insurance buyer is expected to answer every such question correctly and in good faith. In case of a wrong answer, the claim amount shall not be reimbursed to the policyholder. The insurance company shall reject the claim if it finds any answer incorrect while evaluating the claim of the policyholders.

Smoking, and consumption of alcohol, tobacco, etc. are likely to increase illness and risks for individuals. This includes cancer, lung diseases, heart ailments, ulcers, liver disease, and many more. Insurance companies rate such individuals as a high-risk factor and offer the insurance policy at a high premium price. For example, an individual who smokes once or twice a day is likely to pay less premium as compared to the individual who smokes many times a day. Similarly, an individual consuming alcohol occasionally is likely to pay less premium as compared to the individual who consumes it on a daily basis.

Occupation of Applicants

The occupation of an individual may also impact the health insurance premium. For example, an individual working in a Bank, IT sector or a shop is not likely to be captivated by an accident or any bodily injury. The risk involved in such cases is minor to moderate. Such individuals may rarely get injured. Hence, the insurance company shall charge a normal premium from such individuals while selling the health insurance products.

However, the policy buyers pursuing hazardous occupations and working in a mine, construction sites, chemical industries, etc. are likely to pay higher premiums in order to buy the health insurance policy.

Hobbies

Hobbies of an individual play a vital role in the approval or rejection of the health insurance application. Some individuals are involved in high-risk activities. This includes mountain hiking, car racing, bike racing, adventure sports, etc. Such activities are associated with high risk which may compromise the life of an individual or cause severe injuries. As a result, the insurance company is likely to charge a higher premium as compared to other individuals who are not involved in high-risk activities.

Pre-existing Disease

An individual who has suffered or suffering from a pre-existing disease is likely to pay a higher premium. Such a disease shall affect the health insurance premium of the policy buyer. In addition, the insurance companies include a term of 1 to 4 years as the waiting period before providing coverage for such health issues. Hence, the individual is expected to pay the higher premium and wait for one to four years in order to file a claim for such pre-existing disease.

However, the group health insurance does not consist of any waiting period. As a result, an individual may file a claim for the illness caused due to pre-existing disease in a group health insurance. Nevertheless, this is not the case with individual health insurance. One may find many individuals dealing with or suffering from high blood pressure, thyroid, diabetes, obesity, etc. These individuals are vulnerable to several health-related issues. Hence, the insurance company charges a higher premium as compared to the normal individual.

Family Medical History

The family medical history is also taken into consideration by the insurance company in order to determine the premium amount to be paid by the policyholder. If the insurance company finds a history of illness in the family of the policyholder, it shall consider the case risky and increase the premium. Such illness includes heart disease, cancer, diabetes, etc. The policy buyer cannot do much in this case but maintain a healthy lifestyle to avoid such diseases running in the family. However, if the history of the family is clean, the insurance company shall offer reward points while selling family floater insurance.

Read more: Critical Illness Insurance

Geographical Location

The location of the policyholder may also influence the premium amount to buy a health insurance policy. For example, one may notice high pollution in Delhi, NCR, etc. during winter. Such pollution may cause severe illness to the individuals. In addition, people in these areas are vulnerable to respiratory disease. The cost of treatment for such disease is advanced in Tier I cities as equated to Tier II and Tier III cities. As a result, the insurance company shall charge a high premium amount for the people residing in such areas. Moreover, people residing in big cities are more vulnerable to many diseases than those residing in small towns.

The insurance company divides the country into separate zones on the basis of various parameters. People living in such zones are likely to pay a high premium. The insurance company considers such people more prone to illness.

Age

The insurance company organises people or policyholders in different age brackets. Old-aged people are more prone to risk. Therefore, the insurance company shall charge high premiums from such individuals. However, the insurance company shall charge a normal premium from young policyholders.

Age cannot be controlled by an individual. It shall increase so increase the premium. However, one may adopt a healthy lifestyle.

Conclusion

Lifestyle factors of a policyholder have a crucial role to play in the health insurance industry. Individuals maintaining healthy lifestyles are required to pay normal premiums. However, insurance companies shall charge high premium rates for people maintaining a sedentary lifestyle. Therefore, an individual must practise yoga, and perform healthy exercises. This includes running, dance, weightlifting etc. This shall help policyholders in order to earn rewards which may be utilised for various healthcare purposes. Health insurance is an important product which must be subscribed to by people in order to avoid financial emergencies in case of an inevitable disease. People must follow healthy habits and avoid consuming alcohol and tobacco to reduce the premium amount and earn rewards.

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FAQs

Q. What is deductible in a health insurance policy?

A. A deductible is the fixed amount which is required to be paid by the policyholder or patient before obtaining the benefits of a health insurance policy. For example, if the policyholder has INR 5,000 as a deductible clause, he is expected to pay the amount INR 5,000 before availing of the claim amount. Therefore, if the hospital charges INR 20,000, the policyholder shall pay INR 5,000 as deductible and the remaining INR 15,000 shall be paid by the insurance company.

Q. What is a co-pay in a health insurance policy?

A. A co-pay is the fixed percentage which is required to be paid by the policyholder before obtaining the claim amount. For example, if a policyholder chooses 10% as the co-pay while buying a health insurance policy, he is expected to pay first the 10% of the total bill charged by the hospital before compelling the insurance company to pay the remaining 90% amount. As a result, if the hospital charges INR 1,00,000, 10% of INR 1,00,000 i.e., INR 10,000 shall be payable by the policyholder or patient as a co-pay and the remaining 90% i.e., INR 90,000 shall be payable by the insurance company.

Q. What is the list of documents required to buy a health insurance policy?

A. One requires the following documents to buy the health insurance policy.

  • Age Proof

Age proof is the most important document to be provided by the policy buyer. It is required to determine the premium to be paid by the policyholder. Therefore, one should provide the age proof of all the members of the family. Mentioned below are the documents which are required for the age proof.

  • Passport
  • Mark sheet (Class 10th or 12th)
  • Driving license
  • PAN card
  • Aadhaar card
  • Birth certificate
  • Address proof

The insured is required to provide the permanent address proof to the policyholders. One may provide the following documents for the same.

  • Telephone bill
  • Ration card
  • Electricity bill
  • Driving license
  • Voter ID
  • Aadhaar card
  • Passport
  • Identity proof

One may provide the following documents as identity proof.

  • Voter ID
  • Passport
  • PAN card
  • Aadhaar card
  • Passport Size Photograph

The insurance company shall ask for the passport-sized photograph of all members or beneficiaries of the health insurance policy.

  • Medical Report

Some insurance companies may seek the policyholder to provide medical reports. The policyholder may undergo medical tests and provide the report.

Q. What are the documents required to claim health insurance?

A. One needs the following documents to claim health insurance.

  • Claim form: It should be obtained by the policyholder from the insurance company. The policyholder should write the correct details along with a signature on the bottom of the form.
  • Identity Proof: This includes an Aadhaar card, PAN card, passport, driving license etc.
  • Prescription: The policyholder must attach the doctor’s prescription suggesting treatment and advising medicines, tests, and consultation
  • Ambulance receipt: It is required in case ambulance services are availed of by the policyholder.
  • FIR: First Information Report or FIR is required in case of injury caused due to an accident.
  • Policy details: This includes the policyholder’s name, address, policy number and disease
  • Bills: The policyholder must submit the original pharmacy bill to the insurer.

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