Deductibles in Insurance

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What is a Deductible?

In health or general insurance, a deductible is the amount you must pay from your own pocket before the insurer starts paying the claim. For example, if you have a health insurance policy with a ₹10,000 deductible, you pay the first ₹10,000 of medical expenses yourself, and the insurer covers the rest.

Is Deductible Applicable in Life Insurance?

No, traditional life insurance policies do not have deductibles. Life insurance plans, whether term plans, savings plans, or ULIPs, pay the full benefit amount to the nominee or policyholder without requiring any cost sharing. There’s no out-of-pocket payment at the time of claim.

What About Life Insurance Riders?

Some life insurance policies offer health-related riders, like:

• Critical Illness Rider
• Hospital Cash Benefit Rider
• Waiver of Premium on Critical Illness/Disability Rider

These riders may include a waiting period, a short, predefined time (for example, 30 days or 90 days) during which claims cannot be made. Waiting period is NOT a deductible. It is simply a time-based eligibility requirement. Once the waiting period is over, you get the full benefit amount without paying anything extra from your pocket.

How Is This Better Than Standalone Health Insurance with Deductibles?

• In standalone health insurance, you may have to pay a deductible or co-payment before the insurer starts settling bills.
• In life insurance health riders, after the waiting period, the entire rider sum assured is paid directly, as a lump sum or daily cash benefit, with no deductible or cost sharing.

Example:

If your life insurance critical illness rider has a 30-day waiting period and you’re diagnosed with a covered illness after that period, the insurer will pay the entire rider benefit amount, e.g., ₹10 lakh, without any deductions.

Why Choose Life Insurance Health Riders?

• No hidden out-of-pocket costs like deductibles
• One-time premium or add-on premium only, no separate health policy needed
• Lump sum payout that you can use for any purpose (treatment, lifestyle support, or income replacement)
• Seamless claim process linked to your existing life policy

In a Nutshell

While deductibles are common in health insurance, they are not applicable in life insurance. At most, certain riders have a waiting period before benefits start, but once eligible, you receive the full payout without sharing any costs, making life insurance riders a more predictable and stress-free way to get health-related financial protection.

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