Deductible (health insurance)

A deductible is the first slice of covered bills a health policy leaves to you or to another policy, before this one starts paying. It is the engine behind top-up and super top-up cover.

How it works

Suppose a policy has a deductible of ₹5 lakh. It pays nothing on the part of your covered bills up to ₹5 lakh; only costs above that line are its responsibility. The gap can be met out of your pocket, by your emergency fund, or, more usefully, by a base health policy. In the standard policy definition, a deductible does not shrink your sum insured; it simply sets where this policy’s cover begins.

Why it makes top-ups cheap

This is the clever part. A plain ₹25 lakh policy is expensive, but a ₹25 lakh top-up sitting above a ₹5 lakh deductible is far cheaper, because big claims are rare and the top-up only pays the portion above ₹5 lakh. Pair a modest base policy, which handles the common smaller bills, with a high-deductible top-up, which handles the rare huge one, and you get a large total cover for a low combined premium.

Deductible versus co-pay

They are different. A deductible is a fixed amount paid first, before the policy pays anything; a co-pay is a percentage of every claim you keep paying even after cover starts. See it in rupees in super top-up vs top-up.