The deductible is the portion of a claim that the policyholder has to bear before the insurer pays any benefits. It is usually between $1,500 and $4,500.
For example, if you are under PlanA of NTUC Income's hospitalisation Enhanced Incomeshield, the deductible is the first $4,500 of a claim.
Co-insurance is a fixed percentage of the claim - what is left after the deductible is accounted for - that a policyholder bears.
This feature means that policyholders share part of the cost of the bill, usually 10 per cent over and above the deductible.
Say you have a health policy with a $1,500 deductible and a 10 per cent co-insurance.
If your claim is $5,000, you must pay the deductible of $1,500 plus 10 per cent of the remaining $3,500, or $350, in co-insurance.
So you pay $1,850, while the insurer takes care of the remaining $3,150.
Why is it important?
All hospitalisation Shield plans have deductible and co-insurance features.
Some insurers provide 'riders' that cover either or both features. You can use only cash to pay the premiums.
So you want to use the term. Just say...
Unless you have a rider, you are still subject to the hospitalisation plan's deductible, co-insurance and annual limits.
This article was first published in The Straits Times on November 16, 2008.
