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Health Insurance Deductible Explained

Published On Jan 13, 2020, Updated On Feb 16, 2021

The choice of an ideal health insurance comes across as easy to many customers. However, there are many that feel confused between two health insurance options, due to lack of knowledge of health insurance terms. 

Have you too come to a stage where you cannot make a health insurance decision? 

Is it the term “deductible” that is making you hesitant to invest in a certain health insurance policy? 

If so, here’s what you need to know about health insurance deductible.

Don't forget to read - The Link Between Top up & Deductible

Health Insurance Deductible - What Is It?

In the field of health insurance, deductible is a limit that the insurer fixes for the claim amount, which the policyholder needs to pay other than the costs borne by the insurance company. 

In other words, health insurance deductible is the amount that the policyholder has to pay as a part of a claim, whenever it takes place, while the rest of the amount is paid by the insurer. It can also be said that deductible in health insurance is the amount that one spends on medical treatment before their insurance starts paying for the medical care. 

Note that deductible is to be paid by the policyholder every time there is a claim and insurer has any extra claim to pay. 

Health Insurance Deductible - How Does It work?

Deductible is a fixed amount that the policyholder has to pay during a specific period, usually an year. Once the deductible is met, the insurance company starts taking cover of the policyholder’s services. However, note that during this period the policyholder is still responsible for co-payments that come with the policy. 

Let us assume that Amit has opted for a health insurance policy with a deductible of Rs. 10,000 for a year. His health insurance claim turns out to be Rs. 35,000. In a case like such, the insurance company will be liable to pay Rs. 25,000 only as Amit will be responsible for paying Rs. 10,000. 

In a case where the policy’s deductible amount is Rs. 20,000 while the claim amount is Rs. 15,000, the insurance company will not pay anything as the claim amount is less than the deductible limit. 

It is important to note that:

  • The insurance company is liable to pay only when the claim amount is more than the deductible amount.  
  • The amount of deductible is non-refundable, even if there is no claim for a specific year. 
  • Health insurance premium is lower for higher deductibles and higher for low deductibles. Deductibles for individual coverage and family coverage are different.

You would also like to read Co-Payment and Deductible - Understanding the Difference

Health Insurance Deductible - Types?

Deductibles in health insurance come into two types, namely Compulsory Deductibles and Voluntary Deductibles.

  • Compulsory Deductibles - An amount fixed by the insurance company that the insured has to pay in claim of a claim. The premium amount does not go low, thereby remaining same in case of compulsory deductibles. The insured is allowed to pay only the deductible amount in case of a claim.
  • Voluntary Deductibles - An amount that the policyholder can decide by themselves, according to their pocket, when the need arises. In case of voluntary deductible, the higher the deductible amount will be, the lower will be the premium of your health insurance policy. In case of a claim, the insured is allowed to pay only the deductible amount.

Health Insurance Deductible - Benefits?

Many customers think that deductibles are not beneficial. However, that’s not the case. No matter how burdensome deductibles may seem, they have their own benefits. One not only gains the chances of getting the No Claim Bonus, but also enhancing their cumulative bonus, since it prevents one from claiming for a few years. In return, bonuses help in increasing the coverage amount in the longer run. 

Also Read

Covering OPD Cover in Health Insurance

How a Health Insurance Policy Benefits Women at Different Stages of Their Life?


When choosing deductible, make sure you consider the long term. Do not forget to analyse whether or not you can continue the payment towards your deductible in the coming time. If you think that the deductible cost may be too higher for you to handle, reducing it would be a smart decision to make. 

If looking forward to gaining more detailed information about health insurance deductible or health insurance plans that come with deductible feature, feel free to contact InsuranceDekho experts at 18001205698.

We would be happy to help!

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