Health Insurance Deductible Explained: How It Works in VHIS
Quick Answer
| Question | Answer |
|---|---|
| What is a deductible? | The amount you pay before the insurer starts reimbursing eligible medical expenses |
| Does every VHIS plan have one? | No. Deductible arrangements vary by plan |
| Is it charged for every claim? | Not always. Some plans calculate it once per policy year |
| Does a higher deductible lower premiums? | Generally, yes |
| Is a zero deductible always better? | No. It reduces claim-time expenses but usually increases premiums |
| Who may consider a higher deductible? | People with sufficient savings or existing medical coverage |
Simple Example
Assume you have:
- Eligible medical expenses: HK$100,000
- Policy deductible: HK$20,000
| Item | Amount |
| Eligible medical expenses | HK$100,000 |
| Deductible paid by you | HK$20,000 |
| Potential insurer reimbursement | HK$80,000 |
The actual reimbursement remains subject to the policy’s coverage, benefit limits, exclusions and other terms.
What Is a Health Insurance Deductible?
A deductible, also known as an excess, is a fixed amount of eligible medical expenses that the insured person must bear before an indemnity-based medical insurance policy starts making reimbursement.
Basic Calculation
Eligible medical expenses − remaining deductible = potential insurer reimbursement
A deductible does not necessarily represent all the expenses you may need to pay yourself.
Other out-of-pocket expenses may include:
- Medical expenses not covered by the policy
- Expenses exceeding annual or itemised limits
- Coinsurance or copayment
- Ward-class adjustments
- Charges exceeding reasonable and customary levels
- Treatment subject to exclusions or special policy terms
Why Do Medical Insurance Plans Have a Deductible?
-
A deductible allows the policyholder to bear part of the initial medical cost in exchange for a generally lower premium.
Potential benefit How it works Lower premiums A higher deductible generally results in a lower premium Major medical protection The plan focuses on larger hospital and treatment expenses Better use of company benefits Group medical reimbursement may help offset the deductible More flexibility Customers can balance premium costs against potential out-of-pocket expenses High-end medical plans commonly use deductibles because they provide higher benefit limits and broader coverage for major medical expenses.
Does VHIS Have a Deductible?
Not every VHIS plan has a deductible.
Deductibles are more commonly found in high-end VHIS plans. Basic or lower-benefit plans may offer coverage without a deductible.
For example:
| Bowtie VHIS plan | Deductible arrangement |
| Bowtie VHIS Standard | No deductible |
| Bowtie VHIS Flexi | No deductible |
| Bowtie Pink VHIS | Offers different deductible options |
Before applying, check the product brochure and policy provisions rather than assuming every VHIS plan works in the same way.
Is a Deductible Charged Per Claim or Per Year?
It depends on the policy design.
Common Deductible Arrangements
| Arrangement | How it works |
| Per claim | A deductible is applied separately to each claim |
| Per disability | Related claims may share one deductible |
| Per policy year | Eligible claims in the same policy year accumulate towards one deductible |
For Bowtie Pink VHIS, the deductible is calculated on a per-policy-year basis and resets on the policy renewal date.
This means:
- Eligible claims in the same policy year may accumulate towards one deductible
- You do not necessarily pay the full deductible for every hospital admission
- Once the deductible is fully met, later eligible claims in the same policy year may not be subject to another deductible
- The deductible resets when the next policy year begins
Example: Two Claims in One Policy Year
Assume:
- Policy-year deductible: HK$20,000
- First eligible claim: HK$12,000
- Second eligible claim: HK$30,000
| Claim | Eligible expenses | Deductible paid | Potential reimbursement |
| First claim | HK$12,000 | HK$12,000 | HK$0 |
| Second claim | HK$30,000 | HK$8,000 | HK$22,000 |
| Total | HK$42,000 | HK$20,000 | HK$22,000 |
After the full HK$20,000 deductible has been met, subsequent eligible claims within the same policy year may be reimbursed without another deductible, subject to the policy terms.
How Is a VHIS Deductible Calculated?
The following simplified examples show how a policy-year deductible may work.
| Scenario | Eligible expenses | Deductible | Paid by policyholder | Potential reimbursement |
| Major hospital claim | HK$1,000,000 | HK$80,000 | HK$80,000 | HK$920,000 |
| Bill equals deductible | HK$80,000 | HK$80,000 | HK$80,000 | HK$0 |
| Bill below deductible | HK$50,000 | HK$80,000 | HK$50,000 | HK$0 |
| Two admissions in one year | HK$160,000 | HK$80,000 | HK$80,000 in total | HK$80,000 |
| Zero-deductible plan | HK$1,000,000 | HK$0 | HK$0 deductible | HK$1,000,000 |
These examples assume all medical expenses are eligible.
Actual reimbursement may also be affected by:
- Annual benefit limits
- Lifetime benefit limits
- Itemised benefit limits
- Policy exclusions
- Coinsurance
- Ward-class adjustments
- Reasonable and customary charges
- Treatment location
- Remaining deductible
Example: How an HK$80,000 Deductible Works
Suppose Mr Chan has:
- Eligible surgery expenses: HK$340,000
- Policy-year deductible: HK$80,000
| Item | Amount |
| Eligible surgery expenses | HK$340,000 |
| Deductible borne by Mr Chan | HK$80,000 |
| Potential insurer reimbursement | HK$260,000 |
If Mr Chan makes another eligible claim within the same policy year after meeting the full deductible, another HK$80,000 deductible may not be applied.
The actual benefit payable remains subject to the policy’s terms and limits.
Is a lower deductible always better? Not necessarily!
Not necessarily.
A lower deductible reduces the amount you need to pay during a claim, but it usually comes with a higher premium.
| Option | Premium level | Claim-time expenses | May suit |
| Zero or low deductible | Higher | Lower | People without other medical coverage |
| Medium deductible | Medium | Medium | Employees with company medical benefits |
| High deductible | Lower | Higher | People with sufficient emergency savings |
Illustrative Premium Comparison
Using the example of a 30-year-old male purchasing Bowtie Pink VHIS Ward Plan:
| Deductible | Illustrative annual premium | Saving versus HK$0 deductible |
| HK$0 | HK$8,424 | — |
| HK$20,000 | HK$4,164 | 50% |
| HK$50,000 | HK$2,856 | 66% |
| HK$80,000 | HK$2,556 | 70% |
In this example:
- Choosing an HK$80,000 deductible saves HK$5,868 per year
- The monthly premium is approximately HK$213
- The policyholder must be prepared to bear up to HK$80,000 of eligible expenses before reimbursement begins
The premium examples are for reference only. Actual premiums may vary according to age, smoking status, underwriting results, selected plan and prevailing premium rates.
You can check the latest options on the Bowtie Pink VHIS product page.
How to Choose Your Deductible When Purchasing VHIS?
There is no single deductible level that suits everyone.
Consider:
- Existing company medical insurance
- Other personal medical insurance
- Emergency savings
- Expected medical needs
- Monthly premium budget
- Ability to pay the deductible at short notice
- Long-term affordability
Quick Decision Table
| Your situation | Deductible to consider | Why |
| No company medical insurance | HK$0 or low deductible | Reduces the amount payable during a claim |
| Company coverage of around HK$20,000 | Around HK$20,000 | Company benefits may help offset the deductible |
| Strong emergency savings | Higher deductible | May reduce regular premiums |
| Children or people with frequent hospital needs | HK$0 or low deductible | Smaller bills may not exceed a high deductible |
| Mainly need protection against major bills | Higher deductible | Focuses premium spending on large medical expenses |
A simple rule is:
Do not choose a deductible higher than the amount you could comfortably pay without affecting essential living expenses.
- Policyholders can exercise this right to lower the deductible to the options available at that time, on the day the insured meets the above age requirements or at least 30 days before the subsequent policy renewal date. Please note that each insured person can only exercise this right once in their lifetime.
Decided on the Deductible? Which Insurer Offers the Best Value?
Children and Homemakers
A zero or low deductible may be more suitable because:
- They may not have company medical benefits
- Smaller hospital bills may not exceed a high deductible
- A high deductible could result in no reimbursement for smaller claims
Before choosing, compare:
- Additional premium for a lower deductible
- Expected hospital usage
- Family emergency savings
- Existing family medical coverage
Employees With Company Medical Insurance
Employees may consider matching the personal VHIS deductible with their company hospital benefit.
| Company medical benefit | Deductible to consider |
| Around HK$10,000 | Around HK$10,000 |
| Around HK$20,000 | Around HK$20,000 |
| Around HK$50,000 | Around HK$50,000 |
Check:
- Company medical reimbursement limit
- Covered ward class
- Whether reimbursement can count towards the personal policy deductible
- Claims submission order
- Whether the company plan ends after changing jobs
- Whether the two policies have compatible coverage
Freelancers and Self-Employed Individuals
Freelancers usually do not have company medical insurance.
Possible approaches include:
| Approach | Potential advantage | Main consideration |
| One zero-deductible plan | Simpler claims process | Higher premium |
| One high-deductible plan | Lower premium | Higher out-of-pocket exposure |
| Basic VHIS plus a high-deductible plan | Broader protection structure | Higher total premium and more complex claims |
Compensation from multiple indemnity-based medical policies cannot normally exceed the actual eligible medical expenses incurred.
People With Strong Emergency Savings
A higher deductible may suit people who:
- Have stable savings
- Can pay the deductible immediately
- Mainly want protection against large medical bills
- Want to reduce regular premiums
Ask yourself:
- Can I pay the full deductible today?
- Would doing so affect rent, mortgage or essential expenses?
- Would I still have enough emergency savings afterwards?
- Can I continue paying the premium after retirement?
- Am I relying too heavily on company medical insurance?
Can Company Medical Insurance Offset the Deductible?
Company medical insurance may help cover part or all of a personal medical insurance deductible, depending on the terms of both policies.
Example
Assume:
- Total eligible hospital expenses: HK$340,000
- Personal VHIS deductible: HK$80,000
- Company medical reimbursement: HK$70,000
| Item | Amount |
| Total eligible expenses | HK$340,000 |
| Personal VHIS deductible | HK$80,000 |
| Company medical reimbursement | HK$70,000 |
| Remaining out-of-pocket deductible | HK$10,000 |
| Potential personal VHIS reimbursement | HK$260,000 |
In this simplified example, the policyholder’s out-of-pocket cost is reduced from HK$80,000 to HK$10,000.
Typical Claims Process
- Submit the claim to the company medical insurer
- Obtain the reimbursement or settlement statement
- Submit the remaining eligible expenses to the personal insurer
- The personal insurer assesses the claim under its deductible and policy terms
Documents may include:
- Hospital invoice
- Original receipt or certified copy
- Medical report
- Company insurer settlement statement
- Personal insurance claim form
- Proof of the remaining unpaid expenses
The total reimbursement from all policies cannot normally exceed the actual eligible medical expenses.
Beyond Deductibles: What to Consider for High-End VHIS?
A deductible and copayment both involve cost sharing, but they work differently.
| Feature | Deductible | Copayment or coinsurance |
| Calculation | Usually a fixed dollar amount | Fixed amount or percentage |
| Timing | Applied before reimbursement begins | Applied to a covered expense or claim |
| Example | First HK$20,000 per policy year | 20% of an eligible bill |
| Can both apply? | Yes | Yes |
Example
A policy may include:
- HK$20,000 annual deductible
- 20% coinsurance for a specified treatment
Even after the deductible has been met, the insured person may still need to pay part of the remaining medical bill.
Can You Change Your Deductible Later?
A request to change the deductible may generally be submitted around the policy renewal date, subject to the policy terms.
| Requested change | Possible requirement |
| Increase the deductible | May be allowed, subject to available options |
| Reduce the deductible | May require new underwriting |
| Remove the deductible | May require new underwriting |
| Exercise a specified policy option | May not require new underwriting if all conditions are met |
Eligible Bowtie Pink policyholders may apply to reduce or remove their deductible without new underwriting at the following ages:
- 55
- 60
- 65
- 70
- 75
- 80
Applicable conditions include:
- The plan has remained continuously in force for at least two years
- The request is made within the specified application period
- The relevant policy option has not previously been exercised
Refer to the latest policy provisions for complete eligibility requirements and available options.
What Else Should You Compare Besides the Deductible?
Do not choose a VHIS plan based only on the deductible or first-year premium.
| Feature | What to check |
| Ward class | General, semi-private or private room |
| Annual benefit limit | Maximum benefit payable each policy year |
| Lifetime benefit limit | Maximum benefit over the policy lifetime |
| Itemised sub-limits | Limits for surgery, room charges or diagnostic services |
| Coverage area | Hong Kong, Asia or worldwide |
| Coinsurance | Percentage of expenses you need to share |
| Reasonable and customary charges | Whether unusually high charges may be adjusted |
| Underwriting | Exclusions, premium loading or special terms |
| Long-term affordability | Whether premiums remain manageable as you age |
Bowtie Pink VHIS currently provides an annual benefit limit of up to HK$20 million and a lifetime benefit limit of HK$80 million. Actual coverage depends on the selected plan and applicable policy terms.
Learn more about the coverage and deductible options on the Bowtie Pink VHIS product page.
Five Questions to Ask Before Choosing
Use this checklist before applying:
- How much can I pay immediately during a hospital claim?
- Do I have company or other medical insurance?
- Is the deductible calculated per claim or per policy year?
- Does the plan also include coinsurance or ward-class adjustments?
- How much premium will I actually save by choosing a higher deductible?
Compare Bowtie Pink VHIS Deductible Options
Before choosing, compare:
- Monthly and long-term premiums
- Deductible amount
- Existing company medical coverage
- Available emergency savings
- Ward-class options
- Annual and lifetime limits
- Coinsurance arrangements
- Long-term affordability
Compare Bowtie Pink VHIS deductible options and get a quote.
The above figures and examples are for illustration only. Actual premiums, coverage and reimbursement are subject to the relevant product brochure, benefit schedule, policy provisions, exclusions, underwriting decision, remaining deductible, benefit limits, reasonable and customary charges and other applicable terms and conditions.
Why is Bowtie ranked #1 in direct sales channels ^ ?
Bowtie’s Head of Brand and Marketing, Alfred Tsang, stated:
“Through innovative technology and a direct-to-consumer model without intermediaries, Bowtie has significantly improved operational efficiency and reduced costs, allowing consumers to access higher quality protection at more affordable prices. We place particular emphasis on the transparency and smoothness of the claims process – customers can directly contact Bowtie’s professional team to handle claims, fulfilling our promise of ‘affordable purchase, smooth claims’.”
- ^According to the provisional statistics on long-term insurance business for the full year 2024 published by the Insurance Authority, Bowtie Life Insurance recorded the highest number of new individual non-single premium policies sold through direct sales channels in Hong Kong during the fourth quarter of 2024.
Frequently Asked Questions
A deductible is a fixed amount that must be paid upfront when submitting a claim, usually calculated per policy year; whereas co-payment is a shared percentage of each claim. Both can coexist in medical policy terms
Not necessarily. A high deductible means you will bear a larger amount of medical expenses yourself. If you do not wish to bear large upfront expenses, you can choose a policy with a low deductible or full coverage (no deductible)
Besides considering your financial capacity and anticipated medical expenses, employees applying for insurance can also assess their company’s medical insurance coverage to choose an appropriate deductible level.
