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How to Lower Health Insurance Premium?

A medical appointment sheet with a stethoscope as example to lower health insurance premium.

Do you want to know how to have a lower health insurance premium? In this post, I am going to share 10 tips to reduce expenses on health insurance premiums.

I learned these tips myself while I was exploring the available options for my son’s medical insurance plan before I finally signed up for him in 2020.

I trust these tips will be useful for those who plan to sign up for a medical insurance plan.

Table of Contents

[Disclaimer: I am not a certified financial planner. My sharing is purely based on my own research and personal experience. To make the best financial decision that suits your own needs, you must conduct your own research and seek the advice of a certified financial planner if necessary]

Factors affecting health insurance premium

Before we can have a lower health insurance premium, let us understand the factors affecting the premium.

Based on my exploration, these are some of the factors affecting medical insurance premiums:

1. Age

Generally, as we age, the risks of requiring medical care or hospitalization also increase. Thus, a similar medical insurance plan for a 25-year-old and a 50-year-old can have a big difference in terms of premium.

Newborns, infants and toddlers, also have a higher health risk. Thus, their premium is also higher.

2. Gender

If you notice, for some health and medical plan, the premium is higher for a female compared to a male applicant. Especially at a certain age band.

According to iBanding, these are the reasons for the difference in premium between males and females:

  • women at childbearing stages have a higher possibility of health complications.
  • women have different risks of diseases or illnesses that men don’t have, such as breast cancer and cervical cancer.
  • the average life expectancy in Malaysia is higher for females.

Therefore, at some age bands, the health insurance premium for a woman is higher than that of a man.

3. Occupation class

An applicant’s profession also might affect the insurance premium.

An applicant who has a higher risk of injury or illness at the workplace such as at a construction site can expect a higher health insurance premium.

Here is an example from AIG Singapore on the type of occupational class for your reference.

Of course, the best would be to ask your own insurance provider about the list of their occupational class. Because the list might differ from one provider to another.

4. Whether you smoke

If you are a smoker, most likely the monthly premium will be higher compared to someone who does not smoke.

This is because smoking increases the risk of developing a serious health issue.

5. Health condition

Current health conditions such as pre-existing illness and Body Mass Index (BMI) also affect the premium.

The insurance provider has the right to impose loading on those with pre-existing illnesses.

6. Family health history

When calculating risks, health insurance providers also take your family health history into account.

Some diseases and disorders can be passed down by blood relatives. This also means higher medical risks for insurance providers.

7. Lifestyle and interest

Risky hobbies such as skydiving or mountain climbing might increase the insurance premium too.

8. Coverage benefits

Of course, the higher and better the coverage benefits, the higher the premium.

9. Riders or add-on benefits

Besides, adding more riders or add-on benefits to your health and medical plan definitely will result in a higher premium.

10. Length of coverage

The longer the coverage, the higher the premium.

11. Features of the medical insurance plan

Additional features such as sharing of the healthcare cost significantly reduce the premium.

Some examples are co-insurance and deductibles plans.

Ten tips on how to lower health insurance premiums?

And now, here are 10 tips to lower health insurance premiums.

For your reference, the majority of the tips below are more applicable to a medical plan attached to an investment-linked policy (ILP).

1. Buy one when you are younger

Often we hear insurance agents say ‘buy insurance while you are still young so that you pay a lower premium’. There is truth in it. Because insurance premium is calculated based on age band.

Actually, there is a certain age where the health insurance premium is higher:

  • newborn, infant and toddler below 6 years old
  • adult above 50 years old

The reasons? Simply because this group of people has a higher risk of needing medical care.

Therefore, you can reduce your health insurance premium when you buy the plan while you are still young.

2. Buy one when you are healthy

The second tip to pay less for health insurance premiums is to buy one when you are healthy.

Because when you have a certain health condition:

  • the health insurance provider has the right to impose loading (additional cost) to your premium due to higher risk.
  • the health insurance provider might require you to go for a medical checkup.

In short, when you are in good health, you can shop around for a better and more affordable health insurance plan.

So, don’t wait. Get a health insurance plan when you are healthy.

3. Adopt a healthy lifestyle

When I read through my insurance policy, I recalled that I need to answer some questions related to my lifestyle.

Then, I realised that this information is required to calculate the risks and it can affect the insurance premium.

To avoid paying more for your health insurance premium, adopt a healthy lifestyle such as:

i. Consider stopping smoking

Based on my husband’s insurance policy, when he applied for the insurance, among the question asked is:

  • do you smoke now? If yes, how many cigarettes per day?
  • have you smoked in the past 12 months? If yes, how many cigarettes per day?

Since health risks are higher for smokers, a health insurance provider might charge a higher premium to mitigate the risks involved.

Therefore, consider stopping smoking to reduce your health insurance premium.

ii. Maintain good shape

Another frequently asked question while applying for an insurance policy is the applicant’s height and weight.

From there, the health insurance provider will be able to calculate the BMI to determine the applicant’s health and fitness condition.

Then, the health insurance provider might impose a higher premium for applicants with unhealthy BMI.

So, it is important to stay at a healthy BMI score to avoid paying more for your health insurance premium.

4. Reasonable and sufficient coverage

Another tip to reduce health insurance premiums is to ask for reasonable but sufficient coverage for the benefits below:

i. Basic sum assured

Do you need that super high basic sum assured?

Perhaps consider having a more reasonable basic sum assured so that you can reduce your health insurance premium.

But, do consider your needs such as:

  • are you the breadwinner of your family?
  • in case of an unfortunate event, will you or your family have financial difficulty?

ii. Medical insurance plan

I know. We all want the highest room and board plan available.

But, think again. Do you really need that room and board of RM600 per day?

Maybe consider a more reasonable room and board amount. A plan with a lower room and board amount can significantly reduce your health insurance premium.

Or perhaps, a better idea is to ask about the room and board charges for those medical centres within your area. Then, you can get a rough idea of the right room and board figure.

iii. Critical illness plan

As for the critical illness benefit, do consider asking for a reasonable plan. The higher the benefits, the more expensive your health insurance premium.

iv. Personal accident

Similar to the above, consider a reasonable but sufficient personal accident benefit.

Do take note that you don’t want to be either underinsured or overinsured yourself.

5. Consider removing low-priority riders

Next is to consider removing low-priority riders. Because the more riders you have, the higher the insurance premium.

So, to reduce your health insurance premium, you might want to consider removing low-priority riders.

Some examples are:

  • hospital income benefit – provided you have sufficient emergency savings in case of hospitalization.
  • spouse payor benefit – only if your spouse is financially independent.

6. Minimal investment premium for a lower premium

For the medical plan attached to the investment-linked plan, if the budget is an issue, perhaps can consider having a minimal investment premium.

The downside would be, the policyholder must monitor the performance of the investment fund to avoid losing insurance coverage.

Anyway, policyholders can still choose to top-up investment premiums in the future, when the budget allows.

7. Consider a cost-sharing plan to lower your health insurance plan

Another way to have lower health insurance is by participating in cost-sharing plans.

One example is the deductible health insurance plan. Where it offers great savings on health insurance premiums.

The group of people below might greatly benefit from a cost-sharing plan:

  • those who rarely get sick or injured
  • those with sufficient savings or emergency fund

You can read more about the deductible plan on RinggitPlus’s best deductible medical cards.

8. Adjusting premium frequency to save cost on premium

Do you know that instead of paying the premium monthly, you can also pay by:

  • quarterly (every 3 months)
  • semi-yearly (every 6 months)
  • annually (yearly)?

Most likely we all pay the premium every month, that is after we receive our monthly salary.

But, do you know insurance premiums can be lower if you choose to pay annually instead of monthly?

But again, you might want to consider another factor involved such as paying monthly would benefit you from the dollar-cost-averaging method.

For a better idea of the pros and cons of different premium payment modes, you might be interested to read MyPF’s article on Insurance Payment Mode – Annually, Half-yearly, Quarterly or Monthly.

9. Consider a standalone health insurance plan to significantly lower the premium

For those on a tight budget, a standalone plan of health insurance might be suitable for you.

From my personal experience of getting quotations for my toddler, there is a great difference in terms of the premium.

But, do take note every policy owner’s need is different and unique.

To better understand a standalone health insurance plan, do read my post on standalone versus investment-linked plans.

10. Engage a reliable insurance agent

Lastly, choose to liaise with a reliable and trustworthy insurance agent. Make sure the insurance agent put your priorities ahead of his own priorities.

Also, make sure the agent understands your needs and follow your requirement.

Avoid insurance agents that send you quotations that far exceed your budget.

From my personal experience, it is not easy to find a reliable insurance agent. Even though rare to get one, they still exist.

For this, you might be interested to read my sharing on the criteria of a good insurance agent.

Final thoughts

One very important thing about paying less for a health insurance premium is that there are trade-offs.

When you choose to pay less, you might not be having the right coverage for yourself or your loved ones.

Or, you need to sacrifice here and there.

So, try to work for things that are within your control and have less impact on coverage benefits.

Such as:

  • adopting a healthy lifestyle
  • getting coverage while still young and healthy
  • considering cost-sharing plans
  • only deal with the right insurance agent

Nevertheless, at least now you know you have options to have a lower health insurance premium.

So, make sure you choose the right health insurance plan that meets your unique needs.

Lastly, I am not an insurance agent or from the insurance industry. My sharing is based on a consumer’s point of view. If you are from the insurance industry, feel free to share your view below.

Image Credits

Image by Darko Stojanovic from Pixabay

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