Deductible

We all want lower health insurance premiums. Raising your deductible is one way to do this. But there are a few things you should know about the process first, before making any decisions.

An insurance deductible is a fixed quantity representing the portion of any insurance claim that is not covered by your insurance provider. So basically, it refers to the expenses that you, as the insured, must pay out-of-pocket before your insurance policy kicks in to cover the rest.

As a general rule, the higher the deductible, the lower the monthly insurance premium. The opposite is also true – policies with a low deductible normally carry a high monthly premium. There are several types of health insurance deductibles as well, with varying amounts for families or individuals. Most insurance policies offer at least partial coverage for most medical services. Many major medical insurance policies, however, have a deductible that does not cover the cost of routine doctor’s visits, but kicks in for more serious medical expenses.

When looking to lower monthly health insurance premiums, many people raise their deductibles. While this is an easy way to reduce your premium, it’s up to you decide which kind of insurance policy is right for you, and what your deductible should be. Different individuals and families require different insurance policies, based on their health and family history.

It’s important to remember that you should only raise your deductible to a level that it won’t ruin you if you wind up having to pay it. If you decide that this is something within your realm of possibilities, you can choose a higher deductible for your insurance policy. The insurance company will reward you with a lower premium, potentially saving you a good deal of money.

Whatever you choose, you should do so strategically. When increasing your deductible, it is possible to save more money than the deductible difference! For example, a healthy, 41-year-old woman can save $1428 per year by raising her deductible from $500 to $1500. This extra money she saved can be used to cover the $1000 difference between her old and new deductible, with money left over. A $250 yearly deductible costs thousands of dollars more each year than a $2500 deductible. A $5000 deductible, if you can afford it, will be even cheaper!

But it’s important that you calculate your own savings, and compare that with your average medical expenses, and the likelihood that you will need to pay above your deductible amount. Put the money you’ve saved aside in in case you do run up more out-of-pocket medical expenses with your higher deductible. Of course, unexpected things occur, and that’s why we have health insurance, but planning to the best of your ability, based on your own unique situation, will put you ahead of the game and save you money.