New Delhi: Health insurance costs have been rising sharply which is forcing many people to rethink their policies. Did you know that where you live also affects how much you pay? Yes, if you’re in a metro city your premium is likely higher than someone in a smaller town.
Your insurance premium isn’t just based on your age, medical history, or coverage amount—there’s another factor you might not have considered. Insurance expert Nikhil Jha explains that where you live also affects your health insurance premium.
“In India, insurers categorise cities into different zones based on risk factors like medical costs, claim frequency, and healthcare expenses. Your zone impacts the premium you pay,” he said.
Insurance companies divide cities into three zones based on healthcare costs, claim frequency, and medical inflation:
– Zone A (Highest Premium): Metro cities like Delhi, Mumbai, Kolkata, and Chennai
– Zone B: Tier-1 and Tier-2 cities
– Zone C (Lowest Premium): Tier-3 cities and rural areas
Your location impacts your health insurance premium, with metro cities having the highest costs.
Healthcare costs are higher in metro cities which means insurance claims tend to be larger. Urban areas also see more claims due to factors like population density and lifestyle-related diseases. Since the risk is greater in cities, insurers have to account for higher expenses when determining premiums. This is why your location plays a key role in deciding how much you pay for health insurance.
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