How Do Insurance Companies Calculate Health Insurance Rates?
Answer:
Health insurance companies look at a couple of factors


when determining how much to charge an individual including the individual’s health, family history, behaviors (such as whether the person is a smoker or non-smoker), and age.

Most health insurance companies require applicants take a physical. The results are weighed and play a role in the premium you will pay for insurance. A healthy person will pay less than a person who is obese and suffering from a variety of health problems. For example, the insurance company will recognize that the unhealthy person will require more doctors’ appointments, more prescriptions, more medical treatments, and extended hospital stays compared to a healthy individual. Because of the increased costs, the unhealthy person’s rates will be higher than the healthy person’s.

If a hereditary disease runs in your family, the insurance company will assume that you are at risk for developing that disease. This makes you more expensive to insure which means you will pay higher premiums.

Smokers will pay higher rates than non-smokers due to the health hazards and associated medical costs of their habit.

Age is another consideration. Because elderly people require more medical care than younger people, their rates will be higher.

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