YOU ASK:

Should I change my health insurance deductible from $1500 to $2500?

WE ANSWER:

You should be the one to decide whether it makes sense to raise your deductible from $1,500 to $2,500. Of course, when you increase your deductible from $1,500 to $2,500, you will also enjoy a drastic decrease in your premiums. You can save more than $1,000 of premiums a year when you do decide to increase your deductibles. However, the question is whether you can pay for this when the time comes that you need to claim for a particular benefit.

A deductible is what you pay every year before the insurance company will start paying. This means that if you have a claim of $5,000, the insurance will pay only $2,500 after you have paid the first $2,500.  

The danger here is that when you only have small claims within the policy year, you may not even get anything from insurance at all. For instance, if your deductible s $1,000 and you have a claim for only $800 within the policy year, you will find that you need to pay for the $800, with your insurance not making any payments to you. So you should strike the right balance between premiums and deductibles.

Here are some things that can help you decide:

  • How often you and your family avail of health care? Assess your risk. Take a look at how often you have had to go to the hospital over the past five years. If your hospital visits are frequent, then it may not be wise to increase your deductible.
  • What is you and your family's lifestyle? If you have a teenage son who is prone to road accidents while driving, or if you smoke or drink, and don't exercise regularly, these may increase the frequency of your claims against your insurance.
  • How much can you shell out in an emergency or catastrophic event? In the event that you do need to avail of your health insurance, can you afford to pay the out-of-pocket expenses at a moment's notice? You should not just take into your deductible but your family's deductibles as well. This is in case you and your family are involved in an accident.
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