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Health Insurance Deductible

Health Insurance Deductible

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Health insurance is crucial to ensure your finances remain safe despite any medical emergency that can occur unexpectedly. Before you opt for a health cover, getting adequate details about the available health policies and thoroughly reviewing your needs helps you make the right decision. Understanding health insurance deductibles and types of deductibles is crucial to ensure how much claim amount you will receive when you file for it.

What is Health Insurance Deductible?

A health insurance deductible is a pre-defined amount you have to pay from your pocket for your medical expenses before getting the claim under medical insurance from the company. It is the part of the claim that you have to pay each year every time you make a claim. The health insurance company will bear the rest up to the policy limits.

Generally, the higher the premium amount, the lower the amount of deductible the person must pay. In the case of a lower monthly premium, there is a likelihood that the insured person may have to pay a higher health insurance deductible.

How Does Health Insurance Deductible Work?

Let us understand health insurance deductible with an example.

>> Rahul purchased an individual health policy. He raised a claim amount of Rs 40,000. The health insurance deductible set by the company is Rs 10,000. In such a case, the company would bear Rs 40,000 – Rs 10,000 = Rs 30,000, and Rahul will pay a deductible from his pocket.

>> In another instance, he makes a claim worth Rs 10,000, and the deductible amount is Rs 15,000. Here, the insurer will not pay anything as it is liable to make payment only when the claim amount is higher than the deductible amount.

Types of Deductibles in Health Insurance

In India, health insurance deductibles are of the following types, namely:

  • Compulsory deductible: These deductibles are mandatory for the insured person and pre-defined as per the plan you choose. It has a fixed amount that you have to pay each time you file for a claim.
  • Voluntary deductible: It is an optional feature given to the insured persons to minimize their premium costs.
  • Comprehensive Deductible: It refers to a single deductible applicable for all the covers policyholders add in the policy and will continue till one reaches the maximum limit.
  • Non-Comprehensive Deductible: It applies only to some specific cover under a health insurance policy. One has to pay the deductible only before getting a claim for specific medical treatment expenses and not for all the expenses.

When choosing cashless medical insurance, one should assess the covers that include or do not include deductible payments and the exact amount and time intervals for making these payments.

Significance of Health Insurance Deductible

The amount of deductible the insured must pay is mentioned in the policy terms and conditions. Let's understand its significance:

  • Deductibles are applied to safeguard the insurance providers' interests from policyholders who do not make genuine health insurance claims or make claims of small amounts.
  • It deters policyholders from making unreasonable claims and instead helps them realize they need to use their policy for genuine cases. 
  • The chances of fraudulent claims will reduce significantly with a medical insurance deductible. 
  • A higher deductible can be a disadvantage; when the claim amount is lesser than the deductible amount specified, the policyholders have to bear the costs from their pocket. Hence, you should pay the utmost care and thought while buying a health plan.

What to Choose Higher or Lower Health Insurance Deductible?

The deductible is calculated after considering insurance coverage, income, the sum insured, etc. It may vary from plan to plan. When deciding on a health policy, keep in mind the deductible as a critical factor.  But, if the question of what to choose a higher or lower deductible scorches your mind, read below:

  • A low deductible works best for those who need higher medical coverage, especially in chronic ailments, frequent hospitalization, long-term treatment, or therapies. 
  • However, those having an individual health cover with no dependants can opt for high-deductible at a lower premium. 
  • Health plans usually have preventive health check-up features on a cashless basis. Hence, there is no need to worry about medical insurance deductible payments for blood pressure or cholesterol checks

Factors impacting the calculation of Medical Insurance Deductible

While understanding the concept of health insurance deductible is vital, the factors impacting its calculation are equally essential. Below are some common points consider while deciding the deductible amount:

  • Pre-existing diseases
  • Present health conditions
  • Past medical history
  • Lifestyle-smoking/tobacco

If you haven't opted for health insurance yet or your renewal is due,  think about how a deductible can be beneficial for you. Get the best health policy from Care Health Insurance at an affordable premium and deductibles to minimize the burden of high treatment costs.

^^Number of Cashless Healthcare Providers till 31st Dec 2022.

#Source: IBAI Claims Handbook for FY 19-20

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