All You Need To Know About Deductibles in Health Insurance
Don’t let health insurance jargon keep you from completely understanding what you’re signing up for. For instance, terms like deductibles, coinsurance, premium policy, and copayments get thrown around often without being entirely understood.Co-insurance and co-payments are easier to grasp when you comprehend the term ‘deductibles’.
What’s A Deductible?
The deductible is the amount that an insurer deducts before paying you for the medical expenses you incur. Most insurance products come with it built-in, and you can’t opt out under any circumstances. Some insurers would ask you to pay this amount as down payment when you pay your bills and then claim the rest of the bill through your insurance.
For instance, let’s assume you’ve taken a policy with a maximum limit of INR 5 lakhs and a deductible of INR 10,000. If you’re hospitalized, and the bill’s come to Rs. 50,000, the insurance company would pay INR 40,000, and you’d have to pay the deductible of INR 10,000 from your own pocket.
What Difference Does a Deductible Make On The Premium?
When you bear a deductible in a health insurance, you can claim the amount only after you have paid the deductible. But, you have lower premiums as a result.
The total bill needs to be more than the amount decided for the deductible. Or, in some cases lesser than the deductible amount. This allows the company to give out lower claims, and you get to benefit from the lower premium. The deductible amount is inclusive of the total premium.
What Are The Benefits Of The Deductible?
You need to pay the deductible in order to claim the insurance on your bills. Having a deductible on the policy lets you opt for a higher cover with a lower premium. When you pay deductible on your premium you reduce the risk involved for the insurance provider.
You also save yourself money that would otherwise be spent on extra charges that generally come along with the policy. This helps you gain discounts on the annual premium of the policy. To increase the coverage on your health insurance, ensure that you opt for a higher deductible amount.
Let’s look at the different parameters you need to factor in before you zero in on any deductible, co-payment ratio, or top-up.
- The condition of your health and your chances of getting hospitalized in the near future should be your primary concern
- If you have a pre-existing condition like diabetes, blood pressure, or any other disorder, and you run a considerable risk of getting hospitalized, then you should not opt for a plan with a deductible
- Going for a deductible insurance plan if you have a base policy in place, and the ones that offer deductibles on an annual aggregate basis rather than on an individual claim
- The higher the co-pay or deductible you go with, the lesser the premium you’ll have to pay
Who should go for high deductible?
High-deductibles are ideal for people who are healthy and are not suffering from any kind of health issues. It is also suitable for young couple, who do not have young children. A major benefit of deductibles is that you will have to pay minimal premium every month. However, on the flip side, you will be accountable for higher health costs in case of hospitalization or a medical emergency than your insurer.