Confused about co-pays and deductibles when selecting your health insurance plan? Read our guide to understand these terms and make informed decisions when choosing your health insurance plan!
Why do we need health insurance?
Everyone knows that to be able to lead a happy life, you must live life to the fullest. Whether that means earning to retire early, travelling the world, or even helping people in need, that dream and passion should not be just another bubble that bursts when medical troubles visit you. In these times, you must be on the lookout for plans to protect you while you chase your passions.
In these times, the costs towards treatments and hospitalisation constantly increase, and lifestyles have a significantly high impact on your health. Health insurance can really help to manage these unprecedented costs from overwhelming you.
Health insurance is a coverage plan insurance companies offer to cover medical expenses when the need arises.
What are the critical features of your health insurance policy?
A health insurance plan is, at its core, a contract and policy between a policyholder and the insurance company. The insurance company reimburses expenses incurred due to illness or injury or pays the care provider of the insured individual directly. It can cover hospitalisation expenses, day-care procedures, and critical illnesses.
Now, you must understand two critical features of your health insurance defined during policy creation. These features are what will best help you select the right health insurance policy,
What is co-pay in health insurance policies?
In a health insurance policy, a co-pay is a fixed amount or percentage you, the insured, must pay out of the medical bill. The insurer will cover the balance.
For instance, after medical treatment, if you receive a bill of 15,000 INR with a 10% co-pay, you will need to pay 1500 INR, and your insurer will cover the balance of 13,500 INR.
Here are three points to remember what is co-pay in medical billing:
Expenses: In a policy with a co-pay feature, you must remember that you will make an expense with each medical payment. The insurer does not cover 100% of the bill under this policy.
Protection: With a co-pay policy, it is essential to note that with a lower fixed co-pay, you, the insured, will be better protected from high medical bills. It also means your assets are well protected.
Premium: A lower co-pay will lead to a high insurance premium. Before purchasing a policy, you must assess the expenses that you can make.
What is deductible in health insurance policies?
In a health insurance policy, the deductible feature is unique. Unlike the co-pay feature, the deductible is the amount you must pay before filing the claim. In this case, the insurance company will pay the claim amount only after you have cleared the deductible.
An example is that you have undergone surgery for which the medical expense is 70,000 INR. Your health insurance policy covers two lakhs and has a deductible of 20,000 INR. This means that you must pay 20,000 INR before filing the claim. Once you have spent 20,000 INR out of your pocket, the insurer will pay the rest.
Considering the nature of this feature, there are two types of deductibles:
Compulsory deductible: With this, the insurer fixed a deductible for the policy and also the policy's premium.
Voluntary deductible: With this, you, the insured, can fix the deductible. This variability also affects the policy’s premium.
Here are four points to remember about deductible in medical billing:
Expenses: With deductible, you will often make more expenses out of pocket to meet the amount set as deductible. In the long run, high deductibles will hurt the overall stability of your savings.
Suitability: The primary purpose of deductibles is to reduce trivial and small claims. Hence, this feature suits anyone who makes fewer claims in a year. It is not suitable for people or families who have a history of medical visits.
Premium: A high deductible will have a lower premium. Ideally, it is best to opt for a lower deductible for your health insurance plan.
Understanding crucial health insurance features, such as co-pay and deductibles, is instrumental in selecting the right policy. With proper guidance, you could walk away with an extremely protected future. With this in mind, it is more important than ever to make sure to trust expert insurance policies like Future Generali’s Health Absolute or Health Elite. In case you want to customise your health insurance tailored to your needs, Future Generali has its very own D.I.Y Health plan. These plans not only offer you the best features but also the most seamless coverage plans.
