Low and high deductibles in health insurance

Before learning about low and high deductibles, it is important to find out what a deductible in health insurance is and how it is different from a premium. The deductible is the amount that you have to pay out of your pocket at the hospital before receiving a claim during a medical emergency. It is a percentage of the amount received from the insurer and only after paying the same can you file a claim with the insurance company.

Whereas premium is the amount that you have to deposit with the insurer once in a specified period of time (months, six months or years). Most people pay health insurance premiums annually.

Thus, premiums and deductibles are completely different things, but they also have a commonality - both of them have to be paid by the insured from their own pocket. Additionally, the relationship between the two is inverse as the higher the premium, the lower the deductible amount will be. Similarly, if you are paying a lower premium, you may have to pay a higher amount of deductibles.

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If you are thinking of buying health insurance, then there are two types of deductibles you need to know about.

Health insurance plan with a low deductible

• Health insurance plans with low deductibles are considered suitable for those who require frequent treatment. Apart from this, those who want to get insurance benefits without any hassle should also opt for a health insurance plan with a low deductible.
• If the deductibles are less, you have to pay a higher premium. However, if the premium is high, you do not need to pay any other amount out of your pocket till the coverage limit.
• If you have low deductibles in your health insurance plan, you can start treatment without any worries in case of a medical emergency.

Health insurance plan with a high deductible

• Health insurance plans with higher deductibles usually have lower premiums.
• In this, the insured has to pay some amount out of their pocket while getting treatment for any medical emergency and after that, the insurance company covers the remaining amount.
• Most critical illness insurance and senior citizen health insurance plans come with a high deductible.

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If you are planning to buy a health insurance policy, then you should know in advance which kind of deductible would be suitable for you. Let us try to understand this through different features of both.

Low Deductible: It is advisable to choose health insurance with low or no deductible in the following situations:

• If you have a health problem that requires frequent hospital visits
• If you have purchased a critical illness or senior citizen health insurance plan
• If you have or are about to have a baby in your home
• If you are planning to have major surgery in the future or you require major surgery.
• Someone in your family has a disease that needs to be treated again and again.

Health insurance plans with low deductibles offer you the same coverage, only with slightly higher premiums. But they help you save a lot of money during medical emergencies or claim settlements.

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High Deductible: Given below are some situations in which a health insurance plan with a high deductible may be suitable for you:

• If you are healthy and have not had any serious health problems before
• if you are under age
• If any senior citizen or physically ill person is not included in your health insurance plan.
• You are not married and you have no dependents.
• If you are not planning any hospitalization for the next two years
• If your premium is high

It is important to mention that if you are unable to pay the premium of your health insurance plan, you may lose the cover. To avoid such situations, one should buy health insurance plans with high deductibles so that you do not have to pay high premiums. However, this decision completely depends on the health needs of the individual as well as their individual preferences.

(Read more: Health insurance plans for family)