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Explainer: What are deductibles in an insurance policy? It is necessary to know otherwise the pocket will be cut

Highlights

Before taking an insurance policy, it is important to understand the terms and conditions of the policy.
Not knowing the terms and conditions creates problems at the time of claim settlement.
Deductibles are also a major part of insurance, especially health insurance.

New Delhi. While taking any insurance policy, it is important to understand, examine and test all the aspects related to it properly. Insurance companies use some such terms, conditions and terms, ignoring or not understanding them can cause a lot of trouble at the time of claim settlement. One such term in health insurance is insurance deductible (deductible). It is used extensively in insurance policies.

Deductible is the fixed amount which the insured has to pay out of his own pocket before the commencement of policy benefits. In other words, the insurance company is liable to pay the claim amount only if it exceeds the deductible. Suppose the deductible of the policy is Rs.30,000 and the insured has claimed Rs.40,000. In such a situation, the insurance company will pay only Rs 10,000 and the insured will have to pay Rs 30,000 from his own pocket.

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There are two types of deductibles
compulsory deduction
Mandatory deductible or deductible is the fixed amount that the policyholder has to pay before filing a claim. It is mandatory and its limit is fixed by the insurance company. Therefore, while taking the policy, make sure to know how much the company has fixed the deductible.

voluntary deduction
In order to reduce the premium amount, insurance companies give the policyholder the option to voluntarily choose the deductible amount. The policyholder can choose the amount that he will have to pay based on the financial strength and medical expenses. If the policyholder opts for higher amount of deductible then he has to pay lower premium.

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advantage of deductibles
Deductibles offer some benefit to both the insurance companies and the policyholder. Actually, the insured can claim the expenses only after spending up to a limit. Due to this, insurance companies do not have to pay money to people for small expenses. This saves them a lot of money and hard work.

The policyholder also does not make small claims due to this clause. This increases his chances of getting the benefit of no claim bonus. Choosing deductibles helps in reducing the cost of health insurance. Apart from this, many companies also offer some more discounts on opting for voluntary deductibles.

Tags: business news, Business news in hindi, Health Insurance, health insurance premium, Insurance

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