Traditionally, factors like your age, overall health history, lifestyle and the sum insured that you opted for decided your health insurance premiums. Health insurance companies are now taking into account the city in which you reside while deciding the premium.The reason: Medical costs vary across cities. Smaller cities are less expensive compared with metros. There is certainly a business case for someone residing in a small city to pay lesser premium that one who resides in a metro.

With zone-based pricing, a health insurance seeker can get the same plan at a discounted premium compared to an individual living in a zone where medical costs are higher. Insurance companies have categorised various cities and towns under their own zoning structure, depending on the average cost of healthcare and claim patterns in different cities. Premium discount across cities ranges from 10-40 per cent. This way, companies ensure they are not overcharging residents of smaller cities and towns.

Compare and then choose As with any insurance plan, comparing the offerings of various health insurance companies is always recommended. This is because all companies do not offer this benefit.

Also, there is no standard pattern for categorising cities. Companies categorise cities based on their internal evaluations and claim histories; premiums are thus charged accordingly. A city that may be bracketed under a higher zone by one company may be in a lower zone going by another’s company categorisation.

Change of city Whether for job reasons or better medical treatment, if you migrate to a new city, you will have to keep the insurer informed. They will endorse the policy document and revise the premium rates accordingly.

If you move to a city that is in a higher zone, you will be charged a higher premium. And, if you move from a metro to a tier-2 or tier-3 city, you will get a refund on your annual premium.

Some companies insert or alter the co-payment clause instead of changing premiums. Most insurers restrict the claim amount if you have migrated to a higher zone without endorsing the policy.

Some of the popular players offering city-based insurance plans include SBI General Health Insurance, Cigna TTK’s ProHealth plan, Star Health and Max Bupa Health Insurance. However, some leading players do not offer these customised plans; so check with your insurer before purchasing a plan.

Before opting for these plans, understand the rules applicable if you are migrating to a different city.

The writer is CEO of Bankbazaar.com

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