ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -This means the insurer is bound to pay the claim amount after it exceeds the deductible amount. The biggest advantage of a deductible as a policyholder is that the higher the deductible, the lower the premium.

Detailed explanation-2: -The cons of high-deductible health plans Since HDHPs generally only cover preventive care, an accident or emergency could result in very high out-of-pocket costs. For example, if you are diagnosed with a medical condition that requires expensive treatment, you’ll be on the hook for the cost of that care.

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: -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-5: -In most cases, the higher a plan’s deductible, the lower the premium. When you’re willing to pay more up front when you need care, you save on what you pay each month. The lower a plan’s deductible, the higher the premium.