What Are Deductibles In Health Insurance?
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Before you buy a health insurance plan, you must understand what the plan entails. Certain insurance jargon can be confusing and misleading. Understanding their meaning and utility can help you pick the right policy. One such term that you are bound to come across when purchasing a health policy is the insurance deductible.
What does Deductible Mean in Health Insurance?
A health insurance deductible is the proportion of the medical/hospitalisation expenses that you have to pay out of your pocket before you can make an insurance claim. The insurance company will pay the claim amount to you or directly to the hospital only when the deductible amount is paid.
In other words, the insurance company will only cover the claim if it is over and above the deductible amount. Any claim below the insurance deductible will be rejected. The deductible amount is added as a clause in health insurance plans to ensure there are no frauds or scams and only genuine claims are raised by customers.
Factors Impact the Deductible Amount in Health Insurance Policy
The insurance deductible can be decided on the basis of the following factors:
- Any pre-existing health conditions before you buy a health plan, such as diabetes, asthma, etc.
- Your current health status
- Your age
- Any past medical conditions or concerns
- Your present lifestyle and habits like smoking and drinking
How Many Types Of Health Deductibles Are There?
There are three different types of health deductibles. You can choose any one of the following:
- Voluntary deductible: A voluntary deductible is when the insured person can choose the deductible amount themselves. So, if you opt for this type, you will be able to select an insurance deductible amount that you can afford and are comfortable with. The decision can be made according to your income capacity and insurance needs. However, as explained above, the higher the premium amount, the lower can be your premium.
- Compulsory deductible: A compulsory insurance deductible is fixed by the insurance company. You do not have a say in the insurance amount and have to abide by the rules set by the insurance provider. Since the compulsory deductible is fixed, it has no impact on the premium of your policy.
- Cumulative deductible: A cumulative deductible is only applicable on family health insurance plans. Family floater plans cover all members of the family, such as the spouse, children, mother, and father. In such policies, the insurance cover is shared by all the people insured. The cumulative deductible is applied to such plans when an insurance claim is made by any person insured under the plan.
Conclusion
The insurance deductible is often seen as a problematic feature in your health insurance plan, but it can benefit you in many ways. So, do not be afraid of this clause. However, you must pay attention to the type of deductible and see if it suits your purpose or not. The amount and type of deductible should be chosen after a careful evaluation of your insurance needs, probable medical expenses, and affordability.
Also read- Dental Insurance - Everything You Must Know!
