When buying a health insurance policy, lots of factors need to be considered to get the right coverage within your budget. One important factor that can reduce your premium amount is the deductible. Deductibles are the amount paid towards your medical expenses before you can raise a claim. However, people often get confused about whether they should opt for a high or low deductible. Let’s find out.
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With some reading and online research you can get to understand your health insurance policy terms and conditions. If you know and understand the different aspects that can affect your policy coverage likes low and high deductibles. By simply doing a thorough comparison of the deductible clause in your health insurance policy you can get to know the reason behind the cost of the premium being high or low and then ultimately purchase and ideal health insurance plan.
Premium and deductibles are some of the key health insurance terms that will help you understand the different health plans in order to make a wise decision. Premium you already know is the cost of your health insurance against the benefits availed. Deductibles on the other hand refer to the percentage of sum insured amount that you need to pay upfront for your treatment before the insurer actually pays it to you. If you choose the higher deductible limit, the lesser will be the premium and higher the amount that you pay from your own pocket.
The relationship between the premium and deductibles is an inverse relationship. It means when the premium is higher, the deductible amount would be lower, and vice versa.
You can choose health plan with two types of deductible options as given below:
Health insurance plan with low deductible:
If you opt for a health insurance plan with high deductible:
If you opt for a health insurance plan with low deductible:
It is ideal to opt for a low or no deductible health plan under the following situations:
So, a lower deductible plan offers equal cover at a slightly higher premium but it saves you a lot of money at the time of claim settlement or a health emergency.
If you opt for a health insurance plan with high deductible:
You can only consider buying a high deductible health plan in case you meet the following criteria:
Takeaway
If you think you won’t be able to pay your policy premiums, and only need health cover for some minor health emergences then you can opt for higher deductibles. But that is only if you think you will be able to pay a portion of the treatment cost. If you do not want to lose out on coverage and want immediate health cover in case of an emergency then go for lower or no deductibles.
In an ideal scenario a hassle free policy with no deductibles is a convenient option. But in certain plans the deductibles can be compulsory depending on the applicant’s age and medical condition. However, the final decision entirely depends upon your individual preferences and healthcare needs.