Health insurance is necessary to protect us in many situations. Whether it’s health insurance, life insurance, or other types of protection, your coverage is never free. While health insurance does coverage a large portion of your medical expenses, there are costs that are not included. In today’s article we will discuss insurance premiums and how they effect you.
An insurance premium is the amount of money you are required to pay in exchange for having a policy. The premium can be calculated in different ways: monthly, quarterly or annually. The level of risk associated with an insured person influences the premium cost. If you want to know more about how your insurance premiums are calculated, keep reading!
What Is A Health Insurance Premium?
An insurance premium is the amount of money you are required to pay in exchange for having a policy. The premium can be calculated in different ways: monthly, quarterly or annually. The level of risk associated with an insured person influences the premium cost. For example, if you buy car insurance and pay $30 per month for three years, this means that in total you will spend $2160 for your car’s coverage. How much your car insurance depends on your driving record, age, and several other factors.
What Factors Affect Your Premium?
The premium reflects the level of risk that an insured person has taken on. The higher the risk, the higher the premium.
The reason for this is simple: if you are more likely to make a claim and need to be compensated for your losses then it will cost more money for insurers to pay out those claims and therefore they must charge you more money in order to cover their costs and make a profit.
Factors that affect health insurance premiums include age, number of dependents, your lifestyle, preexisting conditions, and how often you expect to use your health insurance.
How Is Your Premium Determined?
When you apply for insurance, the insurance company uses the information you provided when filling out your insurance application and asks for additional information if necessary. A good example of an additional piece of information could be a copy of your driver’s license or passport. You have a lot of control over your premium depending on the amount of coverage you want to purchase.
For example, if you want a larger network and intend to see multiple specialists, your premium will be higher. If you just want basic benefits and a limited network, your premium will be lower.
How Your Information Is Used
When you purchase insurance, your insurer does not disclose all of your personal data to third parties, but only those required for processing your claims or managing your policy.
Insurers are required by law to keep your information confidential and secure. They may share information with third parties if:
- You give consent (for example, when you sign up for an online account)
- It is required by law (for example, when there are legal proceedings against you)
Insurers also share non-identifiable information about policyholders with other insurers in order to help them make better decisions about pricing and underwriting products effectively.
Premiums Can Change
If you make changes in your life that affect your insurance needs, it’s important that you inform your insurer immediately. This is especially true if you already have an active claim with an insurer and suddenly need another type of coverage from another provider.
The reason for this is that most insurers require a waiting period before they will accept new claims or renewals, so it’s important to keep them informed about any relevant changes in order for them to process those requests as quickly as possible
Insuraway Can Help You Find A Premium That Fits Your Lifestyle
Now that you know what an insurance premium is, it’s time to start thinking about how much coverage you need and how much money you can afford to pay monthly. With so many different types of policies available today, you must find one that fits your needs as closely as possible. At Insuraway we can review your life and healthcare needs and find a premium that fits your needs perfectly. Give us a call and see if you can qualify for a policy as low as $10/month.
