What is the point of an insurance deductible?


Most people are not familiar with the terms used in health or major medical insurance contracts or policies. One of our objectives as an insurer is to provide you with information so that you master the subject and can make better use of the services you have contracted.

Surely at some point you have heard insurance agents mention the word deductible , but… do you know what their role is in terms of health insurance? Beyond memorizing a concept or repeating phrases, what we are looking for as specialists in the sector is that you appropriate the term and know the advantages you have as an insured.

What is the deductible of your health insurance ?

The deductible must be understood as a percentage that has been agreed to share responsibilities for the insured property, in this case personal or family health. This is done so that the contracted services are fulfilled and there is no irresponsible accident rate.

Here are other ways to understand the function of the deductible in health insurance andin other types of insurance:

The Mexican Association of Insurance Institutions (AMIS) defines the deductible as: the amount or percentage established in a policy whose amount must be exceeded for a claim to be paid.

In Insurance Plan denominated deductible to the maximum fixed amount that is borne by the insured, which corresponds to the first expenses. The deductible is established on the title page of each policy and is applied once per condition. If the expense to be covered exceeds the agreed amount, it will be the insurer’s obligation to pay the rest.

In summary, we can say that when health or other insurance is contracted, the deductible fulfills the function of sharing the risk between the insured and the insurer. So, when a disease or specific expense related to it occurs, the insured has to pay an amount (previously stipulated) out of pocket, that is the deductible.

Examples of how your insurance deductible applies

Let’s look at some practical examples:

Example 1: If the deductible determined in your policy is $5,000 for disease “X”, you as the insured must pay that amount in full. For its part, the insurer will pay the necessary extra money to that $5,000.

Example 2: Let’s think that the cost of an illness is $100,000 and your deductible is agreed at 3 UMAM, so you would have to contribute $7,704.00.

The deductible is always agreed at UMAM. Value of the UMAM: $2,568 pesos

Depending on the insurance you have purchased, the deductible can be a specific amount, or a percentage of the total amount of insurance. Generally, if the deductible amount is high, the cost of the premium is lower.

According to data shared by the National Commission for the Protection and Defense of Users of Financial Services (Condusef). In Mexico, the percentage of the deductible is set concerning the number of claims that are recorded and the amount of money that, in a certain period, is paid by insurers per event.

As we already mentioned, offering you this information is intended for you to know the contracted services and make the most of your insurance. At Plan Seguro we have different health insurance options, which focus on the different needs of our clients.

By aamritri

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