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Demystifying Health Insurance Concepts: Deductible

An aware customer always makes the right choice of products. Even while choosing insurance policies being aware about various aspects of the policy leads to making the right choice. It’s true that the aim behind you investing in a health insurance policy is to keep you safe, happy and stress-free from the trouble of getting burdened by worries of an unforeseen event. One such aspect that you have to be aware of while buying health insurance is ‘deductible’.

Health insurance has a concept called cost sharing; it implies that you and your health insurance company share the medical expense. Deductible is a type of cost sharing. Being aware of health insurance deductible helps you choose the right health insurance policy. Also, it keeps you aware when and how much you need to pay when you avail health insurance cover benefits.

Understanding the concept of Health Insurance Deductible

Deductible is the amount that you have to pay for healthcare services before your health insurance company starts to pay. Let’s understand this with the help of an example:

You are unwell and get admitted to the hospital. The medical expenses to be paid are Rs.2000 and your deductible is Rs.400, then you pay Rs.400 from your own pocket first, before your insurance company pays the balance amount of Rs.1,600. Suppose your medical care expenses added up to just Rs.400, then you would pay Rs.400 and the insurance company would pay nothing.

So before you choose a health insurance policy, discuss with your insurance policy provider the health insurance deductible vis-à-vis your Sum Assured.

High and low deductible plans

When you understand how high and low deductible plans and premiums work, how these affect your coverage, it leads to you choosing the appropriate health care plan.

When you are willing to pay a high premium amount your deductible will be lower. High deductible health plans are also referred as ‘consumer-directed plans’.  High health insurance deductible works for people who are quite healthy and for those without children. They don’t have frequent and high medical expenses, so it’s advisable to choose high deductibles with a low premium.

Low deductibles are appropriate for people who need a considerable amount of medical care. People with chronic illnesses, who visit specialists frequently and get hospitalized save more in the long run with low deductibles.

When you choose a health insurance policy, be aware of the health insurance deductible. Ask your insurance provider the amount of deductible you have to pay. Choose a health insurance policy depending upon your medical care needs. Share this article with your family and friends to keep them aware too.

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Published on:7 Dec, 2015

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