What Do You Mean By Deductibles In Health Insurance?

With the growing awareness about health insurance policies, many people are investing in a health insurance policy for themselves as well as their families. But, while choosing a suitable health insurance coverage and making a decision regarding the same, people often get confused with the terms of the policy and thus pay not much attention to it. One such term being the deductibles. It is crucial that you pay attention to the deductible term of your policy, as it affects the claim settlement process. 

About Deductibles 

A deductible is the amount of money that is paid by the policyholder before the sum assured under the health insurance coverage comes into play. It is the amount that the policyholder has to pay before the insurer starts paying for it. Deductibles have a limit that is set by the insurer with the consent of the policyholder. There are different types of deductibles that are offered as options to the customers. Let us look at the two types of deductibles and their features:

1. Compulsory Deductibles

Under this type of deductible, the amount is fixed by the insurer and it has to be paid by the policyholder at the time of making a claim. When making a claim for their purchased health insurance policy, the policyholder has to pay only the deductible amount to a certain limit as mentioned by the insurance company. After the limit is crossed, the remaining medical expenses are incurred by the insurer.  

2. Voluntary Deductibles 

The amount under this deductible is decided by the policyholders themselves according to their financial budget. In the case of voluntary deductibles, with the increase in the deductible amount the premium payment decreases and vice versa. The insured has to pay only the deductible amount at the time of making a claim in case of an emergency. 

Importance of Deductibles 

There is a widely accepted myth that deductibles are not beneficial for the customers, which is false. Deductibles prevent the policyholders from making unnecessary claims of small amounts. If you do not make claims for a period in the policy tenure, then you become eligible for no claim bonus and cumulative bonus which increases the sum assured under your purchased health insurance policy to a certain amount. It makes sure that affordable medical expenses are met by the policyholders themselves without seeking support from the insurance covers. The bonus offered to the customers can increase your sum assured or decrease your premium payment, depending on the insurance company. The premium in the case of compulsory deductible remains the same, however, in the case of voluntary deductibles, the premium amount decreases with the increase in the deductible amount. 

How Is The Deductible Different From The Co-Payment Clause?

In the case of the co-payment clause, the policyholder is asked to pay a fixed amount or percentage of the cost of treatment incurred during hospitalization while for deductibles the amount is fixed and is paid by the policyholder regardless of the cost of treatment. Co-payment is applicable only on certain medical services which are mentioned by the insurers and deductibles are applicable at the time of making any type of claim of your purchased health insurance policy. 

Conclusion 

Choosing the type of deductible depends on various factors like your financial state, medical history, pre-existing diseases, type of plan, insurance company, etc. and therefore, you must thoroughly go through the terms and conditions of your policy to make sure that you have chosen the most appropriate policy for yourself and your loved ones. You must always discuss the fine print of your policy and clear all your grievances regarding the same with your insurer to avoid any confusion at the time of making a claim in case of an emergency. 

Must Read: Health Insurance Co-Payment V/S Health Insurance Deductible

Health Insurance Deductible Explained

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.