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Factors Affecting Premium of Critical Illness Insurance Policy

The new decade has brought forth a new epidemic every now and then, and the latest health epidemic has affected the entire world. As the world is facing a severe medical pandemic, everyone is shifting their focus to what should have always been their primary concern: health.

While the modern era has brought countless developments to ease up our routine lifestyle, convenience has some drawbacks as well. Our current lifestyle choices are severely affecting our health, and while the first solution would be a better daily choice, you should always have a backup plan.

Health insurances can be considered the perfect backup to fool-proof your medical concerns. Modern India seems to have picked up on this, and over 1.3 billion people have insured their loved ones under a health insurance plan.

After protecting your family with a health insurance plan it is also important for you to increase the overall protection level by adding a Critical Illness Insurance Policy to your insurance portfolio. A critical illness insurance policy pays a lump sum amount on getting diagnosed with the listed critical illness, it effectively helps in ensuring that you have sufficient funds to battle the critical illness and get back on your feet at the earliest possible.

Before you buy a Critical Illness Insurance Policy you should know how the premium is determined, here are the factors that affect the premium of a critical illness insurance policy. Go through them and get the best critical illness insurance at an affordable price:

10 Factors Affecting Critical Illness Insurance Policy


  • Sure enough, age plays the most vital role when it comes to critical illness insurance policies. Although life is unpredictable, it is less likely that a young insurance holder would face serious health issues compared to an older one. Therefore, insurance companies offer relatively cheaper policies to young applicants.

  • However, it does not mean you should get a health insurance plan as soon as possible. That would not be rational because then you’d be paying the company for years before actually making any use of it. On the other hand, waiting to get a health insurance plan too late does not make sense either.

  • You have to play it right to make the most out of your policy, so getting a policy in your early 20s might be an ideal pick. This way, realistically, you are neither too late nor too early to get the ample benefits of critical illness insurance.


  • The next factor is gender, and you may rightfully wonder what that has to do with anything. The insurance companies study the demography of their clients, and statistically, a woman is likely to live 5 years longer than a man.

  • This means that a female policyholder will be paying the company for a relatively long time. hence, a female applicant gets mildly cheaper critical illness insurance premium rates than a male candidate.

  • However, several insurance companies pan out the gender assessment contrastingly, raising the premium amount for female policyholders. The reason behind this is straightforward; a female insurance holder is more likely to take medical check-ups, prescriptions, and visit doctors.

Pre-Existing Health Issues

  • Although there are tailor-made insurances created to cover pre-existing health conditions, an insurance company understandably prefers a healthy policyholder. That does not mean that you cannot get a suitable policy; it simply changes the options for you.

  • An applicant needs to provide detailed health records proving he does not possess any existing medical issues. The computed premium in such cases will be comparatively lower.

  • If you have any pre-existing diseases, the insurance company might decide not to cover your condition, meaning you have to bear the expenses yourself. Even if the company decides to cover your illness, the premium for the critical illness insurance would be higher for you.

BMI (Body Mass Index)

  • It is no surprise that your current health condition affects the premium for your health insurance plan. A higher Body Mass Index straight away means a higher probability of medical issues concerning the joints, heart, sugar level, etc. It then directly converts to frequent doctor visits and medical care, meaning more costs for the insurance company.

  • Furthermore, a person with a high BMI will need specialised care during procedures such as pregnancy and childbirth. Health issues like obesity, diabetes, and hypertension can worsen with time and trigger the critical illness insurance to cover for it. Therefore, the insurance companies compute a higher insurance premium for an applicant with a high BMI.

Ancestral Health History

  • Not much can be done about your family background, especially from a health standpoint. If your family has a history with cancer, strokes, or heart-attacks, then you might find availing a critical illness health insurance plan a bit harder.

  • You cannot stop your genes from carrying the medical conditions, and these issues can cause severe health issues, even if you lead a healthy lifestyle. Therefore, an insurance company would refrain from assigning you a standard health insurance plan.

  • The company will not straight away reject you, but your premium will be costlier than a normal individual. Although different insurers assess these issues differently, a family health issue will most likely affect your insurance premium.

Lifestyle Choices and Habits

  • It is no rocket science that anyone leading an unhealthy lifestyle will encounter more health issues. Therefore, habits like alcohol consumption or smoking put a dent on your chances of availing critical illness insurance with low premiums.

The insurance company also assesses the applicant’s lifestyle preferences for adventure sports and general hobbies. For instance, your insurance premium will be kept higher if you have a knack for high-rush activities like skydiving, scuba diving, mountain climbing, or motorsports.

Applicant’s Profession

  • Your profession also plays a vital role in your critical illness insurance premium computation. If you work under extreme conditions like coal mines or construction sites, then your premium will be costlier.

  • The simple logic behind this is that such individuals are likely to face an accident than someone working a desk job. More accidents mean more doctor visits and medical care, ultimately costing the insurance company.

Residence Location

  • It may not seem likely, but several insurance companies calculate health insurance plan premiums based on your home’s location. The idea behind this is the belief that residing in a metro location gives one access to prime health care services in case of any health emergency.

Coverage Level

  • A broader coverage means a higher critical illness insurance premium as the applicant has opted for additional policy benefits. The math is simple; more benefits means more cost, thus costly premiums.

Critical Diseases Covered

  • If the critical illness insurance you are choosing covers more critical illnesses, then the ascertained premium will be expensive, too. More illness cover means frequent hospital visits, thus higher medical costs.


  • Life insurance is becoming a popular choice amidst urban India, and over 44% of the population has opted for a health insurance plan, one way or another. The numbers of the insured individuals have rapidly increased - only a few years back, a mere 24% of the population opted for health insurance. The increasing surge is entirely justifiable; given the ongoing health pandemics, the world is going through.

  • Although health is a priority for the majority of the population, they still want affordability. To get the best out of your critical illness health insurance plan, you need to be familiar with the factors that affect them.

  • Numerous factors play a part in the premium assessment of critical illness health insurance. Although the majority of these factors revolve around the policyholder’s health, external factors like age, gender, lifestyle choices, coverage helps determine your critical illness insurance premium.

  • As several factors affect your health insurance premium, you need to research your options thoroughly and only then pick one.

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