Insurance Deductible (excess)

A deductible is the cost payable by the insured which is deducted from the reimbursable sum. In simple terms it is the amount of the claim that you have to pay out of your own pocket. Deductibles may be placed on a plan by the insurance company to cover a particular risk or selected by the policyholder to reduce the cost of the premium. There are a number of different types of deductibles that can be used depending on the policy you select. Types of deductibles include:

Per Condition

For each medical condition that requires treatment the insured will be required to pay a percentage or fixed sum of the treatment costs. For example if a $50 deductible is in force the insured will have to pay the first $50 of treatment per condition. If the treatment costs totalled $150 the insured would pay $50 and the insurance company would pay $100. Once the $50 has been paid by the insured all further treatment for the condition will be paid by the insurance company. If however the insured at a later date requires treatment for a different condition he/she will again pay the first $50 of the costs.

Per Year

An annual limit is a common form of deductible. In this instance an annual limit is agreed upon by the insurance company and the policy holder. The insured will be required to pay for their treatment up to the agreed annual limit. Once the limit has been reached the insurance company will be responsible for all further costs. If a $100 deductible is in force the insured will be required to pay for the first $100 of treatment they receive. The insurance company will then be responsible for all further costs.

Co-insurance

Co-insurance is most commonly found for dental and maternity benefits. Co-insurance is the amount that the policy holder is required to pay by the insurance company. It is generally expressed as a percentage. If a 20% co-insurance exists and the cost of treatment is $100, the insured will be required to pay $20 (20%).

Feel free to contact our expert consultants to clarify any of the above points or to discuss your medical insurance needs further.

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