Types of Deductibles in Health Insurance
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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. Also, it is equally necessary to be aware of the health insurance terminologies and the basics components of insurance so that you get the most out of your plan. A deductible is among the insurance jargon that you should know about, especially if you want to ensure you do not face any hassle during claim settlement. Simply put, it is a limit set by your health insurance provider. As a policyholder, you will have to bear a part of the claim amount, every time you raise a claim.
Understanding health insurance deductibles and types of deductibles in health insurance are extremely important so that an individual can plan his or her finances. That is, when buying health plans, it is essential to consider the costs of premium and deductibles.
A health insurance deductible is a pre-defined that a policyholder must pay to the insurer before he or she can start to make claims under medical insurance. This amount is a part of the claim and the rest is borne by the insurer, up to the policy limits and as per the terms and conditions.
Generally, the higher the premium amount, the lower is the amount of deductible the person is required to 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. The premium is the amount an insured person regularly pays to the insurer for the health coverage he or she receives.
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 insurer is Rs 10,000. In such a case, the amount of claim borne by the insurer would be Rs 40,000 – Rs 10,000 = Rs 30,000. The deductible is the expenses that Rahul will pay 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.
In India, health insurance deductibles are of the following types, namely:
When choosing cashless medical insurance, one should assess the covers that include deductible payments, the covers that do not include deductible payments as well as the exact amount and time intervals for making these payments.
The amount of deductible the insured must pay is mentioned in the policy terms and conditions. In case it is not clear to understand, one must contact the insurer.
Deductibles are applied to safeguard the interests of the insurance providers 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 realise they need to use their policy for genuine cases. Thus, the chances of fraudulent claims significantly reduce.
For an insured person, a higher deductible can be a disadvantage; when the claim amount is lesser than the deductible amount specified, the policyholder has to bear the costs from his or her pocket. Hence, the utmost care and thought should be given when buying a health plan.
The deductible is calculated after taking into account factors such as insurance coverage, income, the sum insured, etc. It may vary from one insurance provider to another. If you have made payment of deductible for a year, at one go, then you would have to pay the deductible amount for your policy next year.
When deciding a health cover, keep in mind the deductible as a critical factor. 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 deductible payments for blood pressure or cholesterol checks.
Get the best health cover by Care Health Insurance (Formerly Religare Health Insurance) at affordable premium and deductibles to minimize the cost burden of high treatment costs.