What is deductible in Health Insurance?

A health emergency can happen anytime. The best preparation to meet such an eventuality includes arming yourself with a health insurance plan.

Buying a Mediclaim policy is, however, not enough. Deciphering the terminology involved in medical insurance is important too. It helps policyholders understand what their policy covers and what it does not.

Let us study a commonly found term in health insurance phraseology – deductible.

What does deductible mean in health insurance?

Many Mediclaim policies come with a clause of deductible. Deductible in health insurance policy refers to the amount that you are willing to pay during the claim process.

For example, if your health insurance plan mentions a deductible clause of Rs. 10,000, then you have to pay this fixed amount, no matter the claim amount is Rs. 20,000 or Rs. 1 lakh. The insurer will cover the rest of the medical expenses; of course, to the extent of the sum insured.

If the claim amount is lower than the deductible, then the insurance company is not bound to pay anything. For example, if the deductible amount is Rs. 10,000 and the claim amount is Rs. 9,000, then the health insurance company won’t compensate for the medical expenses incurred by the insured.

A deductible clause is included in health insurance plans to discourage policyholders from making small claims. It also deters them from making claims repeatedly.

Medical deductible and co-payment are different

Policyholders often are confused about co-payment clause and healthcare deductible. The two things are vastly different from each other.

The co-payment clause states that a policyholder has to pay a part of the claim. For example, it is a 30:70 clause. In the case of Rs. 1-lakh claim, the policyholder has to pay Rs. 30,000 at the time of hospitalisation and the insurer will pay Rs. 70,000. Similarly, for a Rs. 10,000-claim, the insured will pay Rs. 3,000, while the insurance company will pay Rs. 7,000.

In the case of health insurance deductible, the amount is always fixed.

If you buy a health insurance policy that has a deductible clause, the premium amount for it is lower than the same for a policy that does not carry such clauses.

Do read your mediclaim policy document to understand the fine print.

Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.