What Are Premiums And Deductibles?

A premium is the monthly bill that you pay to keep your insurance policy in effect. Usually, if you pay your premium, you can continue to have the plan for as long as you want.

A deductible is the set amount of a medical expense that you have to pay before your insurance coverage begins. Most health plans have a deductible — though some managed care plans don’t, including HMOs.

More About Premiums…

Your premium is based on your current health status, along with any past medical conditions. For example, if you have a chronic condition like diabetes your premiums may be higher. And if you smoke, your premiums can be 3 times as much as a non-smoker. So the healthier you are, the lower your premiums will be.

And as you get older, you are more likely to need healthcare. So your premiums will likely go up with age.

But for the most part, if you pay your premiums you can always keep your health coverage.

More About Deductibles…

A deductible is the amount of a medical bill that you have to pay — before your coverage starts picking up the bill. For example: if you have a deductible of $1,000 and a medical bill is $7,000, you have to pay the first $1,000. Then your coverage will kick in and help pay the remaining $6,000.

Deductibles and premiums are closely related. If you have a high deductible, then your premium will be low. And it goes the other way as well — a plan with a low deductible will have a high premium.

Choose The Right Combo

Many plans let you choose if you want a higher or lower deductible — and your choice will influence what your premiums are. So make sure you choose a deductible that’s best for your budget.

Ask yourself: Do you want a low monthly payment? Or do you want to make sure you don’t have any major medical bills?

Request your free quotes and get the expert advice you need to make an educated decision on your healthcare costs. Compare plans online and see for yourself which one is best for you.