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How to Compare Health Insurance Plans Before You Purchase Health Insurance

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Updated September 02, 2013

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Money Question #2: What Is the Deductible?

Your deductible is the amount you will pay out of your pocket before insurance will pay for your healthcare. A higher deductible will mean a lower premium, and lower deductible will mean a higher premium.

Generally, if you are quite healthy, then you can afford to choose a high deductible plan and keep your premiums lower, because you won’t need to see your doctor so often. If you have a chronic health problem or get sick or injured frequently, then you are better off keeping your premiums higher and letting your insurance kick in sooner.

A deductible will typically be $250 up to $5000, and may vary depending on how many family members you are insuring. That means you will pay that $250 to $5000 before insurance begins to pay for your care.

If you choose a very high deductible, your insurance may be considered to be “catastrophic,” meaning it is intended to take care of you only in a situation that would otherwise be catastrophic to your finances.

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