How to Read High-Deductible Insurance Plan Documents
In the insurance business, a deductible means the amount of money the insured person must pay out of his own pocket before the insurance policy will step in and cover a cost protected by the plan. High deductible insurance plans carry lower monthly premium payments than low deductible plans, but can also put the insured person at risk of a large financial burden in the event he needs to use his insurance. When reading an insurance plan document for a policy with a high deductible, it is important to understand how the deductible will affect claims and what parts of the policy the deducible applies to.
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Instructions
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Read the policy carefully and pay special attention to any mention of the deductible. Most health and auto insurance policies will cite that that many things are insured 100% after the deductible is paid. This means that one must pay the full amount of the deductible before the insurance company will cover any costs.
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Use a pen or highlighter to circle or underline parts of the policy you do not understand or parts you would like clarified.
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Ask an insurance professional to clarify the parts you do not fully understand. Insurance agents are in the business of helping their clients understand policies; this helps them make a sale.
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Ask a friend or family member, who is familiar with insurance policies, to help you read through the policy. Even if you understand the policy and how the deductible works, it can be useful to have an opinion of someone who is looking out for your best interest. Insurance agents may attempt to put a positive spin on things to make a sale.
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Reread the policy one last time before buying it. After gaining a better understanding of how the policy works, a fresh read may give new perspectives on certain parts of the policy.
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Tips & Warnings
High deductible health insurance policies are usually best for those who are young and healthy or those that have high income and can cover the deductible without it becoming too much of a financial burden.
