Health insurance plan, which one to choose?


With the increase in lifestyle-related illnesses, it has become imperative to purchase health insurance. However, buying a health plan includes paying a certain amount of premium which can skyrocket if the buyer opts for a large sum insured. In order to reduce the premium, the buyer can increase the deductible amount.

Deductibles are often a source of confusion for a health insurance buyer. However, it is not advisable to purchase a health plan without understanding the policy’s premium and deductible clauses. An insurance plan is a balance between premium and deductibles. This means that the more a buyer is willing to pay monthly on the premium, the lower the deductibles will be.

What is the insurance deductible?

A deductible is a percentage of the total sum insured in the health plan that the purchaser must prepay for treatment before receiving reimbursement from the insurance company.

For example, if the buyer has opted for Rs 20,000 as the deductible and the claim amount for the treatment is Rs 1 lakh, the insurer is liable to pay only Rs 80,000. If the claim amount does not exceed the deductible, the insurer is not required to pay any amount.

What impact does this have on the premium?

The amount of premium paid for a health plan and the deductible are inversely related. If a buyer chooses a higher deductible amount, this would result in a lower premium amount.

Types of packages

There are two types of franchise options the buyer can choose from:

  • Reduced deductible health insurance plan
  • High deductible health insurance plan
  • In plans with zero or low deductible, the amount of premium paid is higher. However, the buyer does not need to pay anything or a small amount for the coverage limit.

    In high deductible plans, the policy premium paid is extremely affordable. However, the buyer will have to bear a predetermined percentage before enjoying the benefits of health insurance coverage.

    Which one to choose ?

    Those who are more likely to be hospitalized for treatment or surgery due to age or a pre-existing condition should opt for health insurance coverage with a low deductible and higher premium. Low deductible health insurance plans are also ideal for those who have a baby or are expecting a baby. This plan is useful in the event of a health emergency, as the buyer will not have to worry about money and can focus on treatment.

    Those who are young with a good medical record and don’t have dependents like children or aging parents can opt for a high deductible health plan. This is because these people see no chance of being hospitalized in the future.

    (Edited by : Sudarsanan Mani)


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