What are deductibles? How to lower out-of-pocket expenses?

When you purchase medical insurance, you might be offered to choose a ‘deductibles’. You may wonder what deductibles are, how claim amounts are calculated for an insurance policy with deductibles, and how to keep the out-of-pocket expenses low, read on as we outline everything you need to know about deductibles.

Author Bowtie Team

Date 2021-06-11

Updated on 2021-08-11

What is a deductible?How are claim amounts calculated for medical insurance with deductibles?Are there VHIS plans with deductibles?How can I lower my deductible payments with Bowtie VHIS?

What is a deductible?

A deductible (or excess) is the amount you need to pay by yourself in the event of a claim before the insurance company makes compensation for you. The insurance company would cover any remaining medical expenses according to the benefit limits in the policy.

There are some medical insurance plans on the market that offer deductibles, usually those high-end medical insurance with relatively high coverage ranging from HK$2.5 million to HK$20 million per year.

How are claim amounts calculated for medical insurance with deductibles?

If you have a medical insurance plan with a HK$16,000 deductible and the total medical expenses are HK$60,000, the insurance company will cover HK$44,000. Calculation as below:

Medical expense – Deductible = Claim Amount

HK$60,000 – HK$16,000 = HK$44,000

If you are also protected by group medical insurance, you can use it to pay for the deductible in your individual medical insurance.

To illustrate, here is an example based on the above case:

Individual Medical Insurance Deductible: HK$16,000
Medical Expenses: HK$60,000
Group Medical Insurance Benefit Limit: HK$50,000

Once receiving compensation of HK$44,000 from your individual medical insurance, you can make a claim to your group medical insurance for the deductible amount of HK$16,000.

Generally speaking, medical insurance with deductibles is more suitable for those who would like high coverage and also have other medical protection such as group medical insurance.

Are there VHIS plans with deductibles?

There are some insurance companies offering high-end VHIS plans with various deductibles:

	Annual Benefit Limit	Annual Deductibles
Plan A	HK$5,000,000	HK$0 / HK$16,000 / HK$25,000
Plan B	HK$5,000,000	HK$0 / HK$16,000 / HK$25,000 / HK$50,000
Plan C	HK$30,000,000	HK$0 / HK$12,000 / HK$40,000 / HK$90,000

*The above data is from the Food and Health Bureau and for reference only. Certain insurance companies may have restrictions on claims (such as ward level or pre/post-hospitalization treatments, etc.) For more details, please check with the insurance provider.

How can I lower my deductible payments with Bowtie VHIS?

If you want higher coverage but don’t want to pay for deductibles, check the case study below:

If you purchased a Bowtie VHIS Standard Plan and a high-end VHIS plan with HK$16,000 deductible from another insurer, you can use your Bowtie VHIS to cover or lower your HK$16,000 deductible.

As you can see, a basic VHIS plan can provide additional protection and minimize your deductible payments. Bowtie VHIS Standard Plan offers an annual benefit limit of HK$420,000 with a monthly premium as low as HK$95^. Get an instant quote now!

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Author

Bowtie Team

The Bowtie Life Insurance Company Limited is an authorized life insurance company and Hong Kong’s very first virtual insurer approved. Through the use of modern technology and medical expertise, Bowtie offers an agent-free, commission-free and more convenient online platform for customers to quote, apply and claim for Voluntary Health Insurance Scheme (VHIS) anytime anywhere. Bowtie is ranked first in the direct channel sales throughout 2021.

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