What is a Compulsory Deductible in Health Insurance?

A compulsory deductible in health insurance is a fixed amount set by the insurer that insured individuals must pay out-of-pocket for medical expenses before coverage begins. It is already negotiated, applicable to all claims, and designed to ensure policyholders' share of medical costs, minimising fraudulent or small, unnecessary claims. You may wonder why deductibles exist. With this deductible, the policyholder has no choice and must pay a pre-negotiated portion of the health insurance claim. IRDAI regulations have set the compulsory deductible, which does not affect the insurance premium. Let's discuss it. Deductibles help keep insurance costs balanced by discouraging policyholders from making unnecessary or small claims. This ultimately helps reduce the number of claims and ensures they are genuine.

Why Should You Go for Deductibles in Health Insurance?

Check out the preliminary reasons why you must select a deductible in your medical insurance:

• Lower Premium: Choosing a higher deductible can lower your health insurance premium. This happens because the insurer rewards you for sharing the medical expenses and reducing its liability. The higher your deductible, the lower your premium.


• Safeguards Coverage: Deductibles can also help to protect your sum insured when it is actually needed. As you will not raise claims frequently, your sum insured will remain protected and available when you need it for a major illness or hospitalisation.


• No Claim Bonus: Choosing a deductible can help you build your no-claim bonus, as you will refrain from filing claims for minor expenses. As major medical expenses do not occur frequently, you may not file any claims during your policy duration, leading to the no-claim bonus reward.

Higher or lower health insurance deductible: Which one is better?

What to Choose? Higher or lower health insurance deductible. Well, the choice between a higher and lower health insurance deductible depends on your financial situation and health needs. While a higher deductible reduces your premium, it increases your out-of-pocket payment during claims. A lower deductible offers more coverage upfront but comes with a higher premium. So, always choose based on your risk tolerance and expected medical expenses.

Understanding compulsory deductibles allows you to make smarter and more beneficial choices while purchasing a plan or planning your healthcare budget. Always choose a deductible amount that aligns with your expected healthcare needs and budget.