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What is High & Low Deductible Health Insurance | Everything to Know About HDHP

What is Insurance Deductible

An insurance deductible is a certain amount that a policyholder needs to pay before receiving the reimbursement from the insurance company. In simpler words, the insurance company is accountable to pay the claim amount if it exceeds the deductible. For instance, if a policy’s deductible is Rs. 30,000 and the claim amount is Rs. 1 lakh, the insurer will be accountable to reimburse Rs. 70,000.

However, if the claim amount does not exceed the deductible, the insurer is not liable to pay any amount. The premium for a high deductible health plan is lower than a plan with a low deductible.

Available option of deductibles in health insurance

Insurance premiums and deductibles are essential health insurance terms that allow individuals to understand various policies to make an informed decision. As already stated, deductibles denote a percentage of the insured sum that policyholders need to pay before the insurer covers the rest.

With in-depth online research, one can understand the terms and conditions of medical insurance policies. If you are mindful of the different aspects that can significantly impact your policy coverage, you can understand the difference in the premium cost and purchase the most suitable one.

Let’s take a look at the two types of deductible options and choose the ideal one:

Low deductible health insurance plan

  • A low deductible health insurance plan is an effective option for individuals requiring regular and hassle-free health care benefits
  • Individuals need to pay a higher premium amount
  • Since the insurance premium is on the higher side, policyholders are not required to pay a substantial amount on their own in contrast to some other health insurance plans
  • Policyholders can start their treatment without any financial burden


High deductible health insurance plan

  • For a high deductible health plan, the insurance premium is comparatively lower.
  • A policyholder needs to pay a percentage of the total cost before obtaining the benefits of an insurance policy
  • Usually, most senior citizens and critical illness plans come with a higher deductible option

Choose between a health insurance plan with higher/lower deductibles

Some medical insurance providers offer a mandatory co-payment clause while other insurers extend the benefit of voluntary co-payment to policyholders, reducing the premium amount.

Following is an illustration of both the deductibles, which will allow policyholders to opt for the most suitable one:

Selecting a low deductible plan

It is sensible to choose a low or 0 deductible insurance plan under the following scenario:
  • If individuals have senior citizen or critical illness medical insurance plan
  • If one’s health condition requires frequent doctor visits
  • If an individual has an infant
  • If a policyholder has any major upcoming surgery
So, a lower deductible insurance plan extends adequate financial coverage at a higher premium. However, it allows individuals to save substantially during the claim settlement or health emergencies.

Selecting a high deductible plan

Individuals should opt for a high deductible health plan when meeting the following eligibility criteria:
  • If individuals have a clean medical history
  • If an individual is unmarried or does not have dependent children
  • If one is young and no elder or senior citizen are covered under the health plan
  • If individuals do not anticipate planned hospitalisation anytime soon and face difficulty in paying a higher premium

More about higher deductibles

Unlike a traditional health plan, a high deductible health plan has a lower premium. The primary aim of this health plan is to incentivise consumer-oriented health care. Besides, some of them also provide additional wellness benefits before the deductible amount is paid. The acceptance rate of higher deductibles has been on the rise since its introduction, as it increases options for employers, both government and private, offering healthcare benefits.

More about lower deductibles

Unlike a high deductible medical insurance plan, a low deductible plan comes with a higher premium. If your claim exceeds the pre-decided limit, insurers pay for the excess amount. Although the premium is higher, it saves individuals from substantial expenses during medical emergencies. In addition, in this type of deductible health plan, the benefits and financial coverage start earlier.

Therefore, if individuals cannot pay a premium and require health cover for minor health emergencies, they can choose a high deductible health plan. However, suppose one does not want to lose out on their financial coverage and foresee any medical expenses in the near future; in that case, they can go ahead with lower deductibles plans. To be able to choose and purchase the best-suited plan online, individuals can log in to the Bajaj Finance Limited platform and choose from a range of healthcare plans designed for different requirements.

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