Health Insurance Deductible

What is Deductible in Health Insurance?

A health insurance deductible is an amount the insured agrees to pay before filing a claim. It is a pre-defined amount you must pay from your pocket for your medical expenses before getting the claim under medical insurance. Let’s say- if you’ve received a treatment bill of Rs 1 lakh with a deductible of Rs 10,000. You can make a claim request after paying the deductible amount. This means you can raise a claim request for Rs 90,000 (Rs 1,00,000-Rs 10,000). Let us understand the working of a deductible elaboratively.

How Does Health Insurance Deductible Work?

Let us understand what is deductible in health insurance 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 would 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 exceeds 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 your chosen plan. It has a fixed amount you must pay each time you file a claim.
• Voluntary Deductible: It is an optional feature given to insured persons to minimise their premium costs.
• Comprehensive Deductible: This refers to a single deductible applicable to all the covers policyholders add to the policy, which will continue until 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 all expenses.

Check for the availability of a deductible before buying any cashless medical insurance policy. Review the deductible details, such as the exact amount, time, etc.

Advantages of Deductibles in Health Insurance

• Lower Premium Amount: The higher the deductible, the lower the premium. A policy with a deductible has a lower premium amount because the insurer may reward you for sharing the medical expenses.
• Mindful Claim Requests: When you have a specific set limit of money to pay yourself, you will carefully make the claim requests. Hence, safeguarding your SI for the actual time of need and when a huge amount of money is required for treatment.
• No-Claim Bonus (NCB): When you don’t raise a claim with small amounts, you can earn an NCB, ultimately benefiting you.

Disadvantages of Deductibles in Health Insurance

In health insurance, deductible also have a few disadvantages for the insured; they are mentioned below.

• Bear the Initial Cost: Even if you have an insurance policy, you must arrange the deductible amount.
• Challenging Situation: During those emergency hours, arranging the medical expenses can turn into a stressful situation.

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 helps them realise 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. Remember, the deductible is critical when deciding on a health policy.  But, if the question of what to choose, a higher or lower deductible, scorch your mind, read below:

• A low deductible works best for those who need higher medical coverage, especially for chronic ailments, frequent hospitalisation, long-term treatment, or therapies.
• However, those with individual health coverage and no dependents can opt for high-deductible at a lower premium.
• Health plans usually offer preventive health check-ups 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 affecting its calculation are equally essential. Below are some common points to consider while deciding the deductible amount:

• Pre-existing diseases
• Present health conditions
• Past medical history
• Lifestyle habits

If you still need to opt for health insurance or your renewal is due, consider how a deductible can benefit you. Get the best health policy from Care Health Insurance at an affordable premium and deductibles to minimise the burden of high treatment costs.

Differences Between Deductible, Co-Pay, and Co-Insurance in Health Insurance

All these terms mean paying out-of-pocket, but the conditions and situations differ. The table below explains the difference between medical insurance deductible, co-pay, and co-insurance.