Deductibles in a Health Insurance Plan

When we go through a health insurance brochure, we often are met with many terms that we are unaware of and would require technical knowledge of insurance to actually understand it. But sometimes no matter how complex the term is, it is important to be aware of the meaning and related details so that you never end up with a product that you never wanted. One such term is 'deductibles'. This word is often misconstrued, hence it is important that people are aware of this particular idea.

A deductible is a basically a limit that has been set by the company providing the insurance depicting the claim amount that policyholder has to foot for herself or himself prior to the company bearing rest of the cost. This deductible amount has to be paid by the policyholder every time a claim arises as well as any extra claim has to be cleared by the insurer.

Why the Need for Deductibles?

A deductible helps the insurance company to guard their interests against unreasonable and regular claims. The deductible amount discourages a policyholder for unrequired treatment. Of course this helps the insurer to avoid claims but it also helps prevent people coming up with trivial situations as well.