An HDHP also features lower premiums. Copyright © 2020 Get Insurance. Consequently, in the course of acquiring insurance, you are sure to encounter words like “Deductible” or “Premium”. Even if you do take the time to review, let’s a say a health insurance glossary of terms, you face the next challenge of deciphering how these complex, interlocking web of costs work together. In short, your premium is the price you each month to remain covered, and your deductible is the money you have to spend out-of-pocket before your insurance benefits kick in to help cover your healthcare costs. The terms premium and deductible are insurance terminology, and it is important to clearly understand the differences between insurance premium and insurance deductible to fully comprehend what your insurance policy offers. (adsbygoogle = window.adsbygoogle || []).push({}); Copyright © 2010-2018 Difference Between. An insurance policy is a contract that is signed between two parties; the insurer and insured in which the insured will pay a fee to the insurer who will in return promise to pay for any loss covered in the insurance policy. Insurance policies are taken out by businesses and individuals to help guard against large financial losses. Two of the most important expenses are your premiums and deductibles, so here’s what you need to know. Premiums and deductibles are terms that are closely related to one another in that they both are insurance terminology. After you meet your d… This deductible starts over at the beginning of each year, although there is no penalty if you don’t meet your deductible in a given year. • An insurance policy is a contract that is signed between two parties; the insurer and insured in which the insured will pay a fee to the insurer who will in return promise to pay for any loss covered in the insurance policy. There are few things in life more frustrating than trying to understand all the terminology and costs associated with your health insurance plan. Virtually every human being has some sort of insurance policy covering him or her. Insurance policies are taken out by businesses and individuals to help guard against large financial losses. Talk to a Licensed Health Agent Right Now! Assess your needs, before making a purchase. Unless you are very much accident-prone or have a higher probability of facing losses (particular losses covered by your insurance), it is better to pick a higher deductible to reduce the cost of the policy (the premium). The amount that you decide to pay as the deductible will depend on how much you can afford to pay upfront. Itemized Deduction for Medical Expenses Health insurance premiums can count as a tax-deductible medical expense (along with other out-of-pocket medical expenses) if you itemize your deductions. Coming from Engineering cum Human Resource Development background, has over 10 years experience in content developmet and management. If you take a second to think about it, you’ll understand why the relationship between premiums and deductibles makes so much sense. • Premiums and deductibles are terms that are closely related to one another in that they both are insurance terminology. These aforementioned costs would not contribute to meeting your deductible. This is because you will meet your deductible faster. Meaning, before you insurance provider helps pay anything towards your healthcare bill, you’ll need to spend money out of your own pocket. The deductible is the amount that the insured will have to pay by themselves before the insurance company will pay out the claim.

Get a free quote in under 5 minutes with our online form! 1. Virtually every human being has some sort of … Read More about Insurance Deductible vs Premium – What you should know, The 21st century ushered us into a new age where … Read More about Top 7 Insurance app in Nigeria, Insurance is the transaction of exchanging money … Read More about Insurance Premium – Meaning and what you should know, One of the major stages of life that every worker … Read More about 6 Types of insurance you need for retirement. The premium is the amount that the buyer of the insurance cover pays the insurance company to maintain their insurance coverage. If you are fit healthy and avoid the doctor at all costs, then you want a plan with lower a premium and higher deductibles.

2. If you choose to pay a higher deductible you will have to pay a lower premium, and if you choose to pay a lower deductible the cost of your premium will be higher. When looking to choose an insurance plan, deciphering the plan which suits your needs depends on what you are looking for.

To answer that question, you have to look at how you will use your insurance. If you have a chronic disease or if you have an ailment that requires you to visit the hospital frequently, it is best to select a higher premium. Insurance Premium - Meaning and what you should know, Insurance Premium and How it Works in Nigeria, African Alliance Insurance Plc- What you should know, International Energy Insurance Plc. An insurance premium is considered as the monthly cost of keeping your insurance policy. The premium is the amount that the buyer of the insurance cover pays the insurance company to maintain their insurance coverage. When shopping for an insurance policy , it may be tempting to choose the policy with the lowest premium. In the insurance world, a higher deductible means a lower premium and vice versa. In short, your premium is the price you each month to remain covered, and your deductible is the money you have to spend out-of-pocket before your insurance benefits kick in to help cover your healthcare costs. All Rights Reserved. A person can decide to pay a higher premium or lower premium, but this will depend on the amount of the deductible that they wish to pay. However, if the need is to visit a health facility, you can expect that your bills would be higher than someone with a higher premium. Find Affordable Health Insurance In Your Area!

The article offers a clear explanation of each of these terms and highlights the differences between premium and deductible. Are you an ill person, or someone with a pre-existing condition who needs to see a doctor weekly.

Hence, it is very important that you make thorough findings of your deductible and premium options to select the best for your situation. What you should know, Nigerian Insurance Industry Database - What you should know, Law Union & Rock Insurance - What you should know, about Insurance Deductible vs Premium – What you should know, about Insurance Premium – Meaning and what you should know, about 6 Types of insurance you need for retirement, Insurance Deductible vs Premium – What you should know, Insurance Premium – Meaning and what you should know, 6 Types of insurance you need for retirement. Premiums and deductibles in health insurance differ but are also closely related, which we’ll touch on in a bit. If you are ready to take the plunge, and purchase some health insurance, then FirstQuote Health is a great place to start. In this article, we are going to examine these two concepts and compare them. • The premium is the fee paid by the insured to the insurance company every month to keep the insurance policy active and to maintain insurance coverage. No, unfortunately your monthly premiums don’t count towards your annual deductible, which is both confusing and frustrating. As a reward, health insurance companies lower your deductible.

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