ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A high deductible means that the insurer’s risk and contribution are reduced. Therefore, the premium amount is low. Critical illnesses, cancer care policies, etc., typically have a higher deductible limit than regular plans.

Detailed explanation-2: -No, your premium does not go towards your deductible, and it doesn’t count for your out-of-pocket maximum, which is the most you’ll pay for care. But deductibles and premiums flow into one another. They have an inverse relationship. When one is more affordable, the other tends to be more expensive.

Detailed explanation-3: -You should consider the risk that comes with higher deductibles: the potential for having to pay out of pocket for claims. Your insurer is willing to charge you a lower premium because you have reduced their risk by undertaking it yourself.

Detailed explanation-4: -A plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but you pay more health care costs yourself before the insurance company starts to pay its share (your deductible).

Detailed explanation-5: -Premium you already know is the cost of your health insurance against the benefits availed. Deductibles on the other hand refer to the percentage of sum insured amount that you need to pay upfront for your treatment before the insurer actually pays it to you.