You can voluntarily reduce your health insurance premium by taking deductions. But there are risks in this too. Let us know how this deduction works.
What can spoil your financial situation – a loss of Rs 50,000 or a loss of Rs 20 lakh. Your answer will be Rs 20 lakh. But what if the same principle is applied to health insurance. Can you take a loss of Rs 50,000 if your health insurance coverage increases from Rs 5 lakh to Rs 25 lakh? In this, you will not have to bear the loss of Rs 20 lakh. Many would call this the perfect deal.
Let us see how it works in the case of health insurance. While buying a health insurance policy, many of us would like to have the maximum sum insured, which would provide adequate protection. However, many people may have to face minor problems. Higher sum insured comes with higher premium. And for many people it will be out of reach. In this case, you can voluntarily reduce your health insurance premium by taking a deduction. But there are risks in this too. Let us know how this deduction works.
How will the premium come down with the voluntary deduction?
Health insurance policies with higher sum insured have higher premiums. It is difficult for many people to get a bigger health cover. However, with the help of voluntary deduction, you can reduce your insurance premium.
Voluntary Deduction is a method of self-insurance, wherein the subscriber can bear the health expenses up to a pre-defined limit. For example, a customer can choose a deductible limit of Rs 50,000, which means they can cover health expenses up to the specified limit. This will help in reducing the premium as the claim can be borne by the insured up to a certain limit.
For example, if you take a health policy with a sum assured of Rs 25 lakh, and a deductible of Rs 50,000, you will have to bear the first Rs 50,000 in a year. If the cost exceeds Rs 50,000 in the same year, then the insurance company will pay up to Rs 25 lakh.
