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Health insurance has undoubtedly become one of the essential parts of your financial planning. While some of you may consider it as an expense, it is, in fact, a save-your-savings plan.
Using a health insurance plan, you can not only take care of financial worries, but also reduce your mental stress.
When you buy health insurance, there are a few terms that you need to consider like the waiting period to your policy, the premium charged along with coverage for pre-existing ailments. Another crucial thing to not miss out is deductibles in your insurance policy. One needs to balance all these aspects together while buying a health insurance cover.
The different considerations have an impact on your final premium amount. The deductibles, however, play an important role in the final premium of your health cover.
Let us understand a few essential terms before exploring whether you should opt for a plan with a high or low deductible –
Premium: Premium is the price that you pay to the insurance company to cover the risk on your behalf. Instead of requiring a considerable outflow to the hospital, you can insure this uncertain medical expense using a health insurance plan.
Deductible: Deductible is that portion of health insurance which the insured has to bear at the time of claim settlement. It is a predetermined amount and agreed between the insurer and the insured at the time of purchasing the health insurance policy.
Whether you buy an individual, critical, group or family health insurance, all of them try to balance the deductible portion while keeping the premiums at affordable prices. The premium of your insurance policy is inversely related to the deductible component. Higher the deductible, lower is the premium and vice versa.
Policies with Higher Deductibles
Here, the insured has to pay a lower premium as the policy has a fixed deductible component. This high deductible portion compensates for the lower premiums charged at present. These types of policies are primarily designed to insure against emergencies and life-threatening diseases.
Policies with Lower Deductibles
When you buy a health insurance policy with lower deductible elements, the premium payment is relatively high. These policies with a lower deductible are suited for those who frequently require medical support.
Now That You Know About Both Types of Plans, Which Policy Should You Opt?
The answer to this question is relative. It does not follow a fixed pattern about one being better than the other.
You need to analyze your spending on healthcare expenses. It will primarily determine the amount of deductible that can be affordable in the long run. Your family’s medical history will help you identify any conditions that might develop in the future and select a policy with an appropriate deductible portion.
Also, analysing your current lifestyle pattern will help in understanding how much reliance on health support will be required in the future. It is best to take into account future hospitalisations like a maternity cover, family health insurance while selecting a deductible to your policy.
Finally, if you are someone who expects your health to take a dip as you may be heading to your thirties, forties & above, you must opt for a plan with a lower deductible, whereas if you are young and have no medical history, a plan with a higher deductible will help save some money on insurance premium.
While you look for insurance policies, make sure you use a health insurance premium calculator that will guide you in selecting suitable policies for you and your family. Stay insured, stay protected!
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