New Delhi (India), November 4: The significance of health insurance cannot be overstated. A health insurance plan provides you with extensive financial protection against medical expenses, ensuring the security of your savings for other life goals.
Nonetheless, it's essential to grasp the intricacies of a health insurance plan before you make a purchase. The insurance world can be filled with terminology that may seem confusing and misleading. Understanding the meaning and purposes of these terms is crucial for selecting the right policy. One such term you'll come across when finalising a health policy is the insurance deductible.
Let's delve into the workings of health insurance deductibles and explore why being well-informed about them is essential.
What is Deductible in Health Insurance?
Health insurance deductible refers to the portion of your medical or hospitalisation expenses that you must personally cover before being eligible to make an insurance claim. The insurance company will disburse the claim amount to either you or directly to the hospital, but this transaction only takes place after the deductible amount has been paid.
In simpler terms, the insurance company's coverage begins only when the claimed amount exceeds the deductible. Any claim falling below the insurance deductible will be declined.
The inclusion of a deductible amount ensures that only legitimate claims are submitted by policyholders.
Let’s Understand Deductible with the Help of an Example
Suppose you have a health insurance plan with a ₹10,000 deductible. You get sick and need to visit the hospital. The total medical expenses incurred during your hospital stay amount to ₹50,000. You are responsible for the initial ₹10,000 because that's your deductible. After you pay the deductible, your insurance provider will start covering the costs. In this case, they would cover the remaining ₹40,000 of your medical expenses.
In another scenario, suppose you have incurred ₹7000 for your hospital stay. As the amount is less than your deductible, you will have to bear the entire amount on your own.
Now that you understand the working of deductibles let’s understand the factors that affect these deductibles.
Factors Affecting the Deductible Amount
The amount of your insurance deductible in a health insurance policy can be determined by considering the following factors:
Any pre-existing health conditions you have before purchasing a health plan, such as diabetes, asthma, etc.
Your current health status
Your age
Any prior medical conditions or health-related issues
Your current lifestyle and habits, including factors like smoking and alcohol consumption
What are the Advantages of Choosing Deductibles?
Premium Reduction: Opting for a higher deductible can lead to a lower monthly premium. This cost-saving measure can add up significantly, helping you save money.
Reduced Claim Frequency: Deductibles are a win-win for you and the insurance company. By making fewer claims, you preserve your insurance coverage when you truly need it. Some insurers even offer discounts like the No Claim Bonus (NCB), further contributing to cost savings when you renew your health policy.
What are the Different Types of Deductibles in Health Insurance?
There are three distinct types of health deductibles, each offering different levels of flexibility:
Voluntary Deductible: With a voluntary deductible, the policyholder has the freedom to select the deductible amount themselves. This means you can choose an insurance deductible that aligns with your financial capacity and insurance requirements. Keep in mind that a higher deductible can lead to lower premiums, making it a choice influenced by your budget.
Compulsory Deductible: In contrast, a compulsory deductible is predetermined by the insurance company, and policyholders have no control over this amount. The insurance provider sets the compulsory deductible, and it doesn't affect your policy's premium.
Cumulative Deductible: Cumulative deductibles are applicable primarily to family health insurance plans. These plans cover all family members, including spouses, children, and parents. The insurance coverage is shared among all individuals insured under the plan. Cumulative deductibles come into play when any insured person under the policy makes a claim.
Each of these deductible types offers different levels of control and may be more suitable depending on your unique insurance needs and financial situation.
Conclusion
In conclusion, the insurance deductible, although often viewed as a potential complication in your health insurance plan, can offer several benefits. Don't shy away from this element. Instead, pay close attention to the type of deductible that aligns with your needs. The choice of deductible, both in terms of amount and type, should be made after a thorough assessment of your insurance requirements, anticipated medical expenses, and financial capacity.
For comprehensive health coverage for both you and your family, explore the Medicare health insurance plans available from Future Generali. To receive a quote, you can visit our health insurance page or reach out to us today
