Deductibles in Family Health Insurance: What to Know

Posted on: Oct 7, 2024 | 3 mins | Written by: HDFC ERGO Team

Deductibles in Family Health Insurance: What to Know

Family health insurance is a popular insurance product that covers all household members under one plan. It can cover you, your spouse, dependent children, and parents, so you won’t have to buy separate health plans for everyone. Since this health plan covers many family members, the sum insured is on the higher side, and so are policy premiums. If you are keen to invest in this insurance product but are worried about paying high premiums, you can opt for a deductible. Read on to learn about deductibles in family health insurance.

Deductibles in health insurance

A deductible is the amount you must pay from your pocket when you file a health insurance claim. Hence, if you raise a claim, you must pay the pre-decided deductible first, and only then the insurer will pay the remaining claim amount. If you fail to pay the deductible, the insurer will not settle your claim.

Let’s understand this with an example:

Suppose you file a health insurance claim of INR 2 lakhs, and the pre-decided deductible amount is INR 60,000. In this case, the insurer will start settling your claim only after you have paid INR 60,000 from your pocket. Once you have paid the deductible amount, the insurer will pay the remaining INR 1,40,000.

Deductibles in family health insurance

Deductibles in family floaters work similarly to deductibles in individual health plans. However, in a family floater, the deductible can apply on an individual or family basis.

• Individual deductibles

If you choose this option, each family member covered under the policy must pay their pre-decided deductible amount before the insurer starts covering their medical bills.

For example, suppose you have covered yourself, your wife, and 2 children under a family floater. The deductible amount for each member is INR 10,000, respectively. You get hospitalised for a medical procedure, and your bills add up to INR 1 lakh. In this case, you must pay your share of the deductible amount, i.e., INR 10,000, before the insurer pays the remaining.

• Family deductible

In this option, your family health insurance policy will have a combined deductible for all family members covered under the policy. Once the deductible is met, the insurer will start covering your medical bills up to the sum insured.

For example, the combined deductible of your family floater is INR 50,000. You get hospitalised, and your bills amount to INR 40,000. Since your hospital bill is less than the deductible amount, you must pay the entire amount from your pocket.

Suppose your child gets injured during the same policy period, and his/her medical bills add up to INR 50,000. In this case, you must pay the remaining deductible of INR 10,000 from your pocket before the insurer starts settling the remaining claim amount of INR 40,000.

Pros and cons of deductibles

The following are the pros and cons of deductibles in health insurance —

• Pros

1. Lower policy premiums

Deductibles reduce health insurance premiums by a significant percentage. The higher the deductible, the lower will be the premium of your health plan. Hence, if you are fit and healthy, you can choose a higher deductible to reduce policy premiums.

2. Judicious healthcare

With a deductible in place, policyholders make judicious healthcare choices as they have to pay a part of their medical bills.

• Cons

1. Financial burden

You must pay for your medical expenses until the pre-decided deductible is reached. This can be a financial burden during medical emergencies, especially if you have a high deductible.

2. Delay in claim settlement

Your insurance provider will start covering your medical bills only after you have paid the deductible. This can delay the claim settlement process and cause additional mental and financial strain.

Conclusion

To sum up, a deductible is an optional health insurance clause that can reduce policy premiums. Hence, if you feel the premium of your family floater is on the higher side, you can opt for a deductible. However, it is important to remember that although deductibles reduce policy premiums, they increase your financial liabilities during medical emergencies. Therefore, weigh the pros and cons and opt for deductibles in family health insurance accordingly.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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