Deductibles and Excess

When deciding which expatriate health insurance policy best suits your needs, it is important to understand some of terminology involved in the structuring of your policy. One of the most common areas of confusion is in the definition of Deductibles (or Excesses) as opposed to Co-insurance, or ‘Co-pays.'

A deductible is the amount of money specified in the insurance policy that the policyholder pays toward each claim, which is subtracted from the amount of money to be reimbursed by the insurer. A co-insurance, or co-pay, is usually a percentage that the policyholder is required to pay towards any health-related treatment.

Insurers may use deductibles to limit their exposure to a particular risk, while the policyholder can use the deductible to reduce the cost of the overall insurance premium without forfeiting any coverage. Deductibles are normally used in either one of two ways: per condition or per year.

Per condition deductibles are a predetermined amount of money that the policyholder will pay towards the treatment of particular condition. For instance, if the policy contains a $20 per condition deductible and then incurs $100 worth of medical bills for the treatment, the policyholder will then pay $20 and the insurance company will reimbursed the policyholder for the remaining $80. A per condition deductible is the most common type of deductible.

Per year deductibles are prearranged annual amounts fixed to a policy. For example, a policyholder has a $50 yearly deductible; the policyholder is then responsible for paying $50 for whatever treatment costs are incurred. Any costs beyond $50 are then reimbursed by the insurance company for the remainder of the policy year.

The co-insurance, or co-pay, is a percentage of the total cost incurred by the insured. This prearranged percentage is to be paid by the insured. For instance, if a 20% co-insurance is attached to a policy; after receiving $100 worth of medical treatment, the policy holder will be responsible for paying $20, while the insurance company will reimburse the remaining $80. Co-insurance, or co-pays, are often used in dental or maternity treatments.

Understanding deductibles will make deciding on the right insurance plan for you a much easier process. The use of deductibles can help reduce your annual insurance premiums while maintaining the same high level of expatriate medical insurance coverage.