The group health insurance premium rates are determined based on several factors. Some of the critical factors that influence the premium rates include the following:
- Sum insured – The maximum coverage amount (per employee/family) for the entire year paid by the insurer. The more the insured amount, the higher will be the premium although not in the same proportion.
- Number of employees/members to be covered – This number plays an important role in determining the premiums. If there are more employees, the aggregated premium would be much higher, although the average cost per employee might be lower. If you want your employees’ immediate family members (spouse, parents, and children) to be covered under the insurance, the premium rates would be much higher.
- Age of the employee/member – Health insurance premiums vary by age of the members. Higher the age, premium rate tend to be higher. Older people are more likely to fall sick and have a higher likelihood of having any pre-existing condition that can result in hospitalisation.
- Features and coverage benefits -You can beef up your group health insurance policies to include more features and benefits. Unsurprisingly, this would cost you more. For instance, you can have waiting periods in your policy or exclude some benefits like maternity expenses that will provide you with more discount on rates.
- Previous claims – The history of previous claims, plays a big role in calculating the premium rate. If your employees have made more claims under the group health insurance policy, the premiums would be higher.
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