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The simple answer is, I don’t know.

There is no easy answer for this question. Which is why it is so important to make sure you are consulting an insurance expert when faced with this decision!

Remember when you bought your first car? You searched and searched, and if you were like me, you did the necessary research to make sure that it was just what you needed, in the budget you wanted and would last long enough to make it through to the next phase of your life. You outlined the pros and cons of the sedan vs. the coupe, and compared it to your lifestyle.

But health insurance is much less black and white than that purchase. There are so many factors that go into it. That is what an insurance expert will help you do with your heath insurance!

First thing’s first, let’s define deductible. A deductible is the amount that you, as the insured, must pay before your insurance company’s payments begin. The amount of the deductible determines the amount of the monthly premiums that you pay as well as what the company contributes toward medical bills.

What is High Deductible Plan?

High-deductible plans are often referred to as “consumer-directed plans.” This means that as the insured, you will be spending a greater amount of money upfront for your initial health care costs. However, you will end up paying lower monthly premiums.

A benefit of high-deductible plans is that you are eligible for a Health Savings Account (HSA) which allows you to set aside an amount of pre-tax dollars for medical expenses.

However, the biggest con of high deductible plans is the steep upfront costs. Your insurance does not kick in until you’ve met your deductible.

Why choose high-deductible?

High-deductible plans are most common for people who are typically healthy or do not have children. Overall, it provides you with lower monthly costs and the opportunity to manage your health care. But if you get sick, you will pay a little more up front.  However, you are protected if you have a catastrophic sickness that could wipe you out financially.

What is a Low-Deductible Plan?

In these plans, the initial amount required to pay before your insurance company takes over is much smaller, but monthly costs end up being much higher. These plans can be less overwhelming at the beginning, however they often end up costing at least twice as much per month as a high-deductible plan.

Why choose low-deductibles?

Low-deductible plans are often more common for families with younger children who are more prone to injuries, or those with chronic illnesses. Although the monthly cost is higher, the initial pay before insurance kicks in is much lower.

In conclusion, there are various factors that go into the decision making process of high vs. low deductible health insurance. Here are four simple questions to keep in mind before you approach your insurance expert.

  • What is your current financial situation in terms of extra money to spend?
  • How is your current health and your family’s health?
  • What so you think estimated medical expenses will be?
  • How comfortable are you paying the necessary amount?

At Henry Insurance Service, we get to know you and your situation. We compare individual health quotes for you and a licensed health insurance agent can help guide you to the right decision for you or your family. That is the Henry difference.