What Is A Health Insurance Deductible?

The insurance industry can be difficult for many, especially if you pore through the technical jargon! But there’s no ignoring them either. The more knowledge you can gain, the better will be your position to make wise decisions and choices for yourself. Among the jargon in the health insurance sector, one common term you might have come across is ‘deductible.’ To know more about it, keep reading.

Health Insurance Deductible – What Is It?

Deductibles are those amounts that the insured will pay as the claim requires. Now, the rest of the amount will be the insurance company’s responsibility. In simple words, the insurance company will only have the liability to pay the claim amount after it exceeds the deductible.

For example, your policy deductible is about USD 30,000, and the insured has claimed about USD 40,000. In that case, the company will pay the excess, which is USD 10,000. But if the claim amount is lesser than that of the deductible, the insurer will not pay any amount.

So, if your health insurance claim is about USD 15,000, and the plan’s deductible amount stands at USD 20,000, the company will not have to shoulder any amount since it’s much below the deductible limit. In these cases, the premium is usually lower than higher deductible policies, while the lower counterparts have higher premiums.

This process works true for almost every insurance company so that the insurer is limited to making minor claims. Also, it’s a way to let them know in advance that they will pay a portion of the total sum. And in this way, genuine claims happen. So before you zero in on any particular policy, assess the deductible structure of the health insurance plan and then proceed.

What About A Deductible In Top-Up Health Insurance?

In top-up plans, deductibles are common. This means there’s a limit till the insurer will bear all such healthcare costs, and the policyholder will bear the remaining portion. The best part about availing of a top-up plan is simply because it offers additional coverage above the existing limit that the present health plan allows.

So if you have a health cover of USD 10K and a deductible of USD 3K, it means your base policy to pay USD 3K remains the same, and the remaining amount of USD 7K is looked after by the top-up policy. But remember that deductibles in these health insurance plans are somewhat different.

Why Exactly Do We Depend On Insurance Deductibles?

Believe it or not, deductibles in health insurance are akin to small and non-desirable claims, simply because there’s considerable insurance coverage. So the premium may be low, and the deductible in the plan can be higher. Surprisingly, this can lead you to lose out on the No Claim Bonus (NCB). Hence, it makes sense to raise a claim, only for higher medical expenses and not the minor ones.

What Are The Diverse Types Of Deductibles In Health Insurance?

Usually, there are two types – compulsory and voluntary. However, there are more types.

Compulsory – It’s mandatory a deductible, governed by the insurance company. In every case where the policyholder would raise a claim, the deductible will have to be paid.

Voluntarily deductible – If you are a policyholder, you must opt for this. The premium will reduce drastically if you opt for a higher deducible. If not require any financial assistance from the insurer, this is a good choice.

Comprehensive and Non-Comprehensive Deductible

Deductibles that keep adding till you pay the total amount for the health insurance policy are comprehensive deductible. On the other hand, non-deductibles are present on covers and not as per the company policy.

Cumulative Deductibles

Applicable for a family floater plan, or health insurance plans that provide an umbrella coverage to the entire family, the insurance company will apply deductibles on all such members who need to pay the total deductible after the inquirer pays off the balance claim amount.

Developing an idea about which one suits the other is a careful thought. Assess the pros and cons of the types of deductibles, and choose the most appropriate one. Initially, you might act skeptical- but slowly, it will all fall back in place.

We hope you found this blog useful. Don’t forget to share it with your friends and loved ones who want to know more about health insurance deductibles.