WHAT IS A DEDUCTIBLE IN HEALTH INSURANCE

More often than not, a layman can be seen complaining that health insurance policies contain so many jargons, which are hard to understand. Nowadays, many insurance companies are coming up with a simplified language and helpful executives to makes things convenient and easy for customers. But certain terminologies are simply impossible to remove from health insurance policies. One such word is "deductible."

What is a deductible in health insurance? (With example)

By deductible, your insurer means that amount which you need to pay by yourself, and the rest of the amount will be compensated by the insurance company. If you still have not understood the concept of deductible, let us help you with an example.

Suppose you make a health care claim of Rs 50,000, and the deductible amount of your health insurance policy is Rs 15,000, then your insurance company will be compensating an amount of Rs (50,000-15,000=35,000). The remaining 15,000 will be paid by you.

Why would you opt for deductibles?

You must be wondering that what is the purpose of deductibles after all, as they make you bear the expenses to some extent. Please know that deductibles bring down the amount of premium which you pay for your health insurance policy.

Also, deductibles will always prevent you from making smaller claims. Thus, you will become eligible for a no-claim bonus. Also, your cumulative bonus will increase in case you have not raised any claims for the last few years. Thus, now you will be getting a greater level of health coverage by paying the same amount of premium.

In case your health insurance plan does not have a minimum deductible amount, you are free to decide the amount of deductible which you will be paying while making claims. Deductibles vary as per the regulations of different insurance companies. A deductible can either be the percentage of the total health coverage amount, or it can be a flat amount.

Types of deductibles you should know about

  • Voluntary deductible:A voluntary deductible is the amount that the insured choses by himself. Different policyholders chose different amount as it depends totally on the financial affordability of the policyholder.
  • Compulsory deductible:This is the minimum amount that is already fixed by the insurer. The insured needs to pay this amount from his own pocket.

Difference between Compulsory and Voluntary deductibles

  • In the case of a compulsory deductible, the amount of premium cannot be lowered since the deductible is a mandatory one. However, in the case of a voluntary deductible, your premium and deductible amount vary inversely.
  • When you place your claim, you will have to pay the fixed amount of deductible in case of compulsory deductibles. But when you go for voluntary deductibles, you will be paying only the amount that you have chosen earlier.

How can you choose the right deductibles?

Now that you have understood what does deductible mean in health insurance, you may feel confused as to which deductible you should go for. Remember that different insurance companies offer different deductibles as per their plan. Some health insurance policies also come without any deductible component. Thus, it is absolutely up to you as to which plan you wish to go for, depending on your financial capability and requirements.

When you have a deductible in your health insurance plan, you will have to take care of certain medical expenditures on your own. However, this will keep your premium low. So, if you are confident that you are capable of handling a specific percentage of hospitalization, then you can opt for insurance plans with deductibles. But in case you are unsure about your finances, you should go for health insurance plans which provides complete coverage and have a fixed premium.

FAQs

Q. When do I have to pay the amount of deductible in health insurance India?

Ans:When you raise a claim, you will have to pay the amount of deductibles from your own pocket, while the insurer will compensate for the remaining amount.

Q. Which types of deductibles should I opt for -compulsory or voluntary?

Ans:Well, the answer totally depends on your financial capabilities. Go through different insurance plans and explore both options, i.e., voluntary and compulsory deductibles. Choose the one which matches your needs and financial position.

Q. How can deductible be beneficial for me?

Ans:Voluntaryhealth insurance deductibles can lower the amount of premium you pay for your health insurance coverage. So, you can enjoy better coverage at the same premium charges.

Q. What will happen when my health insurance coverage stands at Rs 50,000 and the amount of deductibles is Rs 10,000?

Ans:When you place a claim for coverage, first you will have to pay Rs 10,000, and then your health insurance company will compensate for the remaining Rs 40,000.

 

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