11.3.2 Premium Factors
Premiums for health insurance are paid regularly for annually renewable benefits. That is, health coverage is subject to change year to year and premiums are subject to increases year to year. The most common form of premium payments is through employee payroll deductions. Deductions are made to the employee's paycheck before the employee even receives the check.
Health premiums can be paid under one of several different payment modes:
- Annual
- Semi-annual
- Quarterly
- Monthly
- Weekly
The least expensive premium mode, of course, is annual. Monthly premiums are paid for through a preauthorized check method usually, and the insurer is able to obtain the payment directly through the policyholder's checking account.
Though there are other factors, following are the main factors that influence the computation of health insurance premiums.
- Interest
- Expenses
- Types of benefits
- Morbidity
- Claims experience
- Insured's age, sex, and occupation
