Deductibles (Excess) vs. Co-insurance (Co-pay)

Reading through or about an insurance policy might tempt you to arm yourself with a copy of "Insurance jargon in simple English" and a large pot of coffee to avoid spacing out during crucial parts. In a vain attempt to make this process a bit less complicated for the consumers, the following is the distinction between some of the most used terms in an insurance policy.

Deductibles verses Co-insurance

Deductibles a.k.a. excess (for those from the Land of the Queen) is the amount of money defined in the insurance policy which the client agrees to pay each policy year and that is deducted from the reimbursable sum. Depending on the plan, you can choose different amounts of deductibles. It's a great way to keep your premiums low, without sacrificing any benefits.

The two types of deductibles generally encountered by the insured are "per condition" and "per year".

1. Per Condition This most common form of deductibles is applied once per treatment of a certain condition. The deductible amount is agreed upon between the insurance company and the policy holder.

Ex: A $30 deductible is applied for the course of treatment for an illness. If the total bill comes to $100, then the insurance company reimburses $70. If the total bill from 3 visits regarding the same illness comes to $300, then $270 is reimbursed by the insurance company.

2. Per Year

An annual limit is agreed upon between the policyholder and an insurance company. When the deductibles have reached this limit, all further expenses are reimbursed in full by the insurance company.

Ex: A $100 dollars deductible is applied per a policy year. A policy holder is responsible for the $100 towards the cost of the illness treatment; the rest will be covered by the insurance company. The policy holder does not have to pay for the rest of the year.

Co-insurance a.k.a. co-pay is a certain amount, most often a percentage of a total cost that insurance company requires policy holder to pay. Coinsurance usually applies for dental or maternity treatments and as for out-patient treatment the client will be reimbursement a percentage of the total expenses.

Ex: If insurance company requires 20% co-insurances and the total bill comes to $100, the policy holder will have $20 and then insurance company will pay the remaining $80.

Although these terms are just the tip of the iceberg that is an insurance policy, it is important to understand them. The higher the deductibles and co-insurance costs are, the lower will be the price of the premium. The final decision is up to you, it's always a bit of a gamble when it comes to purchasing an insurance plan because you never know what medical concerns you might come across. You might not go to the doctor a single time during an entire year, but if something serious does happen, you can bet on being very grateful to the decision of purchasing a comprehensive insurance plan.

We have a large number of experienced medical consultants that would be pleased to answer any of your questions or provide you with quotes for international major medical insurance. Feel free to contact us and we will ensure your enquiry is replied to via telephone or email within 24 hours.