Your Funds: Choose deductibles to lower your premium

Many people are aware of the need of purchasing health insurance, but they are also looking for methods to reduce their premium costs. There are several options available from insurers to lower a policyholder’s health insurance premium. Tax deductions are among such methods. Choosing a deductible for your personal health insurance plan is a better course of action if you need to reduce your premium without sacrificing your coverage.

Deductible for viability of finances
A deductible is the amount that policyholders must pay out of pocket before their insurance begins to pay for medical expenses. For example, if your health plan has a Rs 1 lakh deductible and you submit a Rs 10 lakh claim, your insurance would pay Rs 9 lakh of your cost, and the remaining amount is your responsibility.

To provide an example from another scenario, let’s assume you submit a Rs 80,000 health insurance claim. Your cost is less than your deductible in this instance, therefore your health insurance is not obligated to pay anything. The deductible, which is an agreed-upon amount that the policyholder must pay out of pocket, inevitably lowers the yearly premium and increases its affordability.

Co-payment vs deductible
Due to the fact that both deductibles and co-payments need upfront payments, consumers often get confused between the two terms. But the two aren’t the same. When paying a co-payment, policyholders are responsible for paying a percentage of their medical costs; the insurer will pay the remaining balance at the time of claim. For example, if your health insurance plan has a 20% co-payment and you make a claim for Rs 10 lakh, you will be required to pay Rs 2 lakh, with the insurer covering the rest Rs 8 lakh. If policyholders choose co-payment, their share of the claim payment increases in proportion to the medical expenditure.

However, by selecting a deductible, policyholders limit their liability to a pre-specified amount. Therefore, choosing a deductible is advised in order to control the cost of the premium. Additionally, choosing an aggregate deductible over a per-claim one guarantees a more fair strategy since the client isn’t required to pay for each claim separately.

categories of deductibles
Both required and optional deductibles exist. The amount that policyholders elect to pay at the time of claim is known as their voluntary deductible. The amount that the insurer sets when the policyholder files a claim is known as the compulsory deductible.

Errors to stay away from while claiming anything
To prevent claim denials, disclose your current health insurance coverage to the new provider. Additionally, avoid filing claims for the same invoices with several insurance. Use your business health insurance first if you have both it and an individual health plan. This may help you accrue no-claim bonuses, which will let you to get extra coverage for your own insurance at a reduced cost.