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What are the Deductibles in Health Insurance in India ?

Deductibles, co-pay, co-insurance - Read the fine print and you will come across these terms in health insurance policies. It is a good idea to know the meaning of these health insurance terms before you choose a plan.

What are deductibles?

Deductible is the amount that a policy holder has to pay before the insurance company starts paying up. In other words, the insurance company is liable to pay the claim amount only when it exceeds the deductible. If the deductible of your policy is Rs 30,000 and the claim by the insured is Rs 40,000, then the insurance company is liable to pay only Rs 10,000. However, if the claim amount is less than the deductible, the insurer is not liable to pay any amount. For high deductible policies, the premium is lower while the low deductible policies have a higher premium.

Significance of deductibles in health insurance

Deductibles prevent people from making trivial claims or go in for unnecessary treatment and hospitalization just because they have insurance cover. Policies with high deductibles mean that you pay a lower premium which is a benefit for you over the years. You do not file unnecessary claims for small amounts and receive a No Claim bonus. The cumulative bonuses help to increase the coverage amount in the long run. The flip side of a deductible is your insurance cover is practically useless if your treatment costs do not exceed the minimum specified deductible. So, understand health insurance terms before you opt for cover from an insurer.

Co-pay clause in health insurance

A co-pay is a fixed amount that the insured has to pay for a covered medical service and the insurer takes care of the rest of the amount. The co-pay amount depends on the nature of the treatment and medications. If your policy has a co-pay clause of 10% and your claim is Rs 50,000, then you will have to pay Rs 5,000. The remaining amount will be covered by the insurer.

The purpose of co-pay clause is to discourage people from making trivial or unnecessary claims and also to reduce burden on the insurers. If people have health insurance, they assume they can undergo treatment at the most expensive hospitals. Co-pay acts as a deterrent.

Whether one needs to opt for a deductible or co-pay insurance depends largely on several factors - present and past medical condition, lifestyle, pre-existing illness, good physical condition etc. It is advisable to examine the health insurance details, understand the health insurance terms before blindly signing up for the policy. This way you avoid unpleasant surprises when you file a claim.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before going ahead with the sales

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