How we calculate health insurance premium

What is a health insurance premium?

An insurance premium is a technical term for the price you pay for coverage under an insurance policy. Usually, insurance companies give you a monthly or yearly premium. Sometimes you can pay quarterly or half-yearly. It depends on what’s available and how you prefer to pay.

You may also need to pay taxes and service fees on top of your premium, depending on where you live and from which insurance company you’ve purchased a plan. Providers do not usually include charges like taxes and services in the premium. Annoyingly, tax can be as high as 20% in some countries, so make sure you check first to avoid surprises.

At William Russell, we do not charge a service fee. But you may still have to pay insurance premium tax if you’re living in the UK or a country in the European Union. We’ll always let you know what taxes you have to pay before you part with any cash.

How will you calculate health insurance premium for me?

We calculate your health insurance premium based on your circumstances. The most important factors are:

• Where you need cover – Private healthcare is more expensive in certain countries and regions.
• Your age – Generally speaking, the older you are the more healthcare you’re likely to need. Premiums get more expensive as you get older.
• Medical history – Health insurance doesn’t typically cover pre-existing medical conditions. Sometimes, you may need to pay an additional premium to get cover for such conditions.
• Optional extras – Perhaps you need cover for complex dental treatment or temporary cover in the USA.

We also take into account ‘baseline risk factors’ affecting the cost of private healthcare around the world, irrespective of your circumstances. These factors include:

• Inflation
• Events such as the COVID-19 pandemic
• The cost of expensive and lengthy new drug and treatment therapies.

Global factors affecting the cost of private healthcare

We mentioned earlier something about ‘baseline risk factors’.

It’s the same thing with international health insurance. Unfortunately, there are plenty of these national, regional, and global trends and patterns which are nothing to do with you at all.

We’ve put together a list of the main global factors that are likely to affect your health insurance premium.

1. Medical inflation – The inflation rate for private healthcare is consistently higher than general inflation. The ever-increasing demand for healthcare means that hospitals and clinics can charge higher prices. The costs of drugs and new sophisticated diagnostics procedures and treatments also drive up costs.
2. Cancer treatment costs – Increasing life spans means that more people will have cancer at some point in their lives. Substantial investment in developing safer and more effective therapies has improved treatment outcomes. However, these therapies are often costly and can run for many years.
3. NextGen drug therapies – There are exciting advances in the field of medical technology, which are improving healthcare outcomes, but these are extremely expensive.
4. COVID-19 – The pandemic has caused unprecedented disruption and placed an extraordinary strain on healthcare systems around the world. It’s a standard view that this strain will adversely affect hospital prices as they try to recover from COVID-19 disruption in the coming year.

At William Russell, we approach premiums differently.

• We’re a small insurance provider relative to the global insurance conglomerates.
• We can provide a much more personal level of service, which means you don’t get passed around a call centre when you telephone us
• You deal with a dedicated account manager every time you have to claim with us.

Because of this, it’s in our interests to keep your premium increases low. So we work closely with our insurer Allianz to make sure you don’t have a nasty shock when you receive your Renewal Invitation each year.

Unlike other providers, your claims history while you’re a member with William Russell won’t affect your renewal premium. Unlike other providers, we don’t think it’s fair to penalise members based on legitimate claims they’ve made in the past. Further, it discourages people from receiving the medical treatment they need because they are concerned about the cost of their renewal premium.

How we calculate health insurance premiums: what you need to know

Whilst a reliable international health insurance policy isn’t usually cheap, there are things you need to know to ensure you’re not paying more than you need to when finding the right policy for you and your family. Here are some of our top rules that will help you understand how health insurance premiums work:

• Your age – Premiums increase as you get older
• Where you need cover – Where you live does make a difference
• Medical history – Health insurance doesn’t typically cover pre-existing medical conditions. Sometimes, you may need to pay an additional premium to get cover for such conditions
• Optional extras – Your premium depends on how much coverage you want. Perhaps you need cover for complex dental treatment
• For most members, making claims does not affect your premium
• No dynamic pricing – We don’t use dynamic pricing
• Your credit score – We don’t check your credit score, and it won’t affect your premium.

Let’s explain each of these rules in more detail.

1/ Your age

Your health insurance premium increases as you get older. Typically, your age-related health insurance premium increase will be around 3% until you reach age 65. This percentage can be higher or lower depending on where you live, and the percentage increase will get sharper as you get older. Between the ages of 65 and 80, your age-related premium increase will be no higher than 6%.

Because age is not the only factor that affects your premiums, where you live, how much coverage you want, and the cost of private healthcare will also make a difference. So, your total premium increase will be higher than your age-related premium increase.

2/ Where you need cover

Health insurance premiums are higher in countries where private healthcare is more expensive. So, how do we know which countries are the costliest?

For 30 years, we’ve worked closely with the leading private hospitals and clinics in pretty much every country on the planet. We know the doctors and specialists, we know how they like to work, and we know how much they charge for different medical treatments.

When we compare these charges to global averages, we begin to paint a picture of which cities, countries, and regions are expensive and which are cheaper. We have decades’ worth of claims and medical data to inform our pricing model.

Our pricing model divides countries into categories based on how expensive private healthcare is. At our last count, we have more than 100 categories. It sounds complicated, but it’s great for our members. If you’re living in Malaysia, we don’t want you to pay over the odds for your health insurance just because private healthcare happens to be expensive in neighbouring Singapore.

To give you an idea on costs in different countries, here are some ballpark figures for common treatments carried out privately. Here is how much you can expect to pay for medical treatment abroad:

Based on our own data from 2019-2020.

Of course, things change all the time. The cost of private healthcare in a country or region can skyrocket very quickly. Treatment for medical conditions in Hong Kong, Singapore, and some cities in Thailand is now almost as expensive as similar treatment in Switzerland and the United States of America. That simply wasn’t the case when we started in the 1990s.

It’s also true that international health insurance gives you cover for medical treatment in multiple countries, so we don’t calculate your premium just according to the country in which you’re living. For example, residents of Indonesia typically travel to Singapore for elective hospital treatment.

3/ Medical history

Health insurance doesn’t typically cover pre-existing medical conditions. Sometimes, you may need to pay an additional premium to get cover for such conditions.

4/Optional extras

Your premium depends on how much coverage you want. Naturally, if you want more generous coverage, you’ll have to pay a higher premium. If you want health insurance with a low excess and all the bells and whistles, you’ll have to pay more. Conversely, a plan with capped limits and fewer options won’t cost you so much.

For us, the most important thing is that you have the cover that you need. We’re not going to spam you with ‘upselling’ you when you’re our member, and we don’t encourage you to purchase a more expensive plan. We’re just happy to have you as a member.

5/ For most members, your claims won’t affect your premium

Unlike some providers, we won’t increase your renewal premium if you’ve made a claim. Members purchase an insurance policy in good faith, so we don’t think it’s fair to penalise them for legitimate claims.

Instead, we use what’s known as a community-based model. We average the money we pay out in claims across all our members, so no one person or group of people has to suffer.

Things are slightly different for members living in Hong Kong. Private healthcare is so expensive in Hong Kong that we have no choice but to take into account our members’ claiming habits when we calculate their premium.

6/ We don’t use dynamic pricing to calculate your premium

Some businesses alter the prices you see for a product depending on the time of day, how many times you’ve visited their website, and how many other people are looking at that product. We don’t do this. Our prices are fixed for each calendar year.

7/ Your credit rating doesn’t affect your premium

Unlike some providers, we don’t check your credit rating when you purchase a plan or renew your plan.

What else can I do to save on my health insurance premium?

There are a few other things you can do to help reduce your premium:

• Consider switching to a cheaper health plan
• Consider increasing your excess
• Consider reducing your area of cover
• Consider some optional restrictions on certain benefits
• Make your premium more manageable by switching to monthly payments

Our promise to you when we calculate health insurance premiums

We’re here to help you control costs

We build our plans to help you control your premium. We have cost-effective plans, excesses with good discounts, smaller areas of cover, and optional benefit limits. These options can help you reduce the amount you spend on health insurance each month or year.

We also have a fantastic team in place who are here to help you during your plan, when it’s time to renew, or when you need medical treatment. We’re smaller than the global insurance conglomerates, but we like it that way: we can give each of our members much more attention.

Our money-back guarantee

Whether you’re purchasing a new plan or you’re renewing your current plan, you can cancel it for any reason within 30 days. We’ll give you a full refund, provided you haven’t claimed.

Making sure we’re fair to our members

We do everything possible to keep premium increases to an absolute minimum, and we’re completely transparent about how we calculate your premiums. Unlike other health insurance providers, it’s in our interests to keep premium increases low.

For our part, we like to make sure you’re getting the best possible service from us. Increasingly, insurers are relying on self-service, AI, and Big Data to do the work for them. We think differently. Healthcare is a highly personal experience, so it deserves a personal service. We’re a team of real people, at the end of a phone call when you need us.