Ever considered buying international health insurance?
Then you know the feeling.
The mountain of paperwork.
The complex terminology.
The endless definitions.
The tiny, intimidating fine print.
Health insurance ranks among the most complex financial products you’ll ever purchase.
And two terms consistently cause the most confusion: excesses and deductibles.
Understanding these concepts isn’t just about knowing insurance jargon.
It’s about making informed choices that directly impact your coverage and costs.
What Exactly Is An Excess?
An excess works in a surprisingly simple way.
Each time you make a claim during your policy year, you pay the specified excess amount out of your own pocket.
Your insurer then covers the remainder.
Here’s how it works in practice:
- You have a €100 excess on your policy
- Your medical treatment costs €2,000
- You pay the first €100 directly
- Your insurer covers the remaining €1,900
This applies to every claim you make.
Have three separate treatments in a year?
You’ll pay that excess three separate times.
Understanding Deductibles
A deductible operates differently.
Think of it as an upfront amount you must pay before your insurance kicks in at all.
Here’s a practical example:
- Your policy has a £1,000 deductible
- Your first claim is £500
- Your second claim is also £500
- You pay both claims entirely yourself, totaling £1,000
- Any subsequent claims are now fully covered by your insurer
Once you’ve met your deductible, you’re done paying for the year.
Even minor claims afterward are fully covered until your policy renews.
It’s worth noting that some plans cover certain services without applying the deductible:
- Routine doctor visits
- Preventive care
- Specific treatments
Additionally, deductible amounts can vary or even be waived when using your insurer’s approved medical facilities.
Always consult your broker for clarity on these details.
The Financial Benefits Of Accepting Deductibles & Excesses
Why would anyone choose to pay more out of pocket?
Simple: it reduces your premium significantly.
The relationship works like this:
| Higher Deductible/Excess | Lower Premium |
| Lower Deductible/Excess | Higher Premium |
At the higher end, deductibles and excesses serve as effective asset protection tools.
Imagine facing a major medical emergency while abroad:
- Medical evacuation
- Specialist treatment
- Extended hospitalization
- Rehabilitation services
Without insurance, costs could reach financially crippling levels.
With a high-deductible policy, your premium remains affordable while protecting you from catastrophic expenses.
You effectively trade a known, manageable cost for protection against unknown, potentially devastating ones.
The Risk Calculation and Insurer’s Perspective
There’s an important calculation to consider here.
While higher deductibles reduce premiums, they also increase your potential out-of-pocket expenses.
Consider this scenario:
- Your plan has a $10,000 deductible
- You require major surgery
- You could end up paying the entire $10,000 yourself
This represents the fundamental insurance trade-off.
From your insurer’s viewpoint, excesses and deductibles serve an important purpose.
They help deter smaller claims that:
- Consume disproportionate administrative resources
- Drive up overall system costs
- Result in higher premiums for everyone
This explains why accepting an excess typically earns you a premium discount.
It’s worthwhile asking your broker to provide multiple quotations with different excess levels.
You might be surprised by the savings, especially if you can comfortably cover small expenses of $100 or $200 for minor treatments.
Making The Right Choice For Your Situation
Excesses and deductibles aren’t new concepts.
They’ve existed across most insurance types for decades.
As a consumer, they give you powerful tools to:
- Manage your premium costs
- Customize coverage to your financial situation
- Protect against catastrophic medical expenses
The implementation and premium impact vary significantly between insurers.
This makes consulting with a specialized broker invaluable for navigating these options.
Frequently Asked Questions
How do I decide whether to choose a policy with an excess or deductible?
Consider your healthcare usage patterns and financial situation. If you rarely need medical care, a higher deductible might save you money through lower premiums. If you require frequent treatment, a lower deductible or excess might be more economical despite the higher premium. Calculate your expected annual healthcare costs and compare different scenarios.
Can excesses and deductibles change during my policy period?
Typically, your excess or deductible amount remains fixed for your policy period. However, you may have options to adjust these amounts at renewal time. Some insurers offer flexibility to change these features, potentially affecting your premium for the upcoming period.
Do emergency treatments require paying the excess or deductible upfront?
In emergency situations, most international health insurers will arrange direct billing with the hospital, and your excess or deductible will be settled later. This ensures you receive immediate care without financial barriers. Always carry your insurance card with emergency contact information for your provider.
Are there any treatments exempt from excesses and deductibles?
Many international health plans exempt certain preventive services, wellness checks, and vaccinations from excess or deductible requirements. This encourages policyholders to maintain regular health screenings. Check your specific policy documents or ask your broker about which services might be fully covered regardless of your excess or deductible.
How do family policies handle excesses and deductibles?
Family policies typically apply excesses or deductibles in one of two ways: either individually to each family member or as an aggregate amount for the entire family. Family aggregate deductibles can offer better value if multiple family members need medical care within the policy year.
Conclusion
Understanding excesses and deductibles isn’t just about reading the fine print.
It’s about taking control of your healthcare costs while ensuring appropriate protection.
Selecting the right balance requires careful consideration of your:
- Financial situation
- Risk tolerance
- Expected healthcare needs
- Travel patterns
International health insurance provides essential protection for today’s globally mobile population.
Making informed choices about excesses and deductibles helps ensure your coverage is right for your needs without paying more than necessary.
Ready to find the perfect balance between coverage and cost?
Book a personalized consultation with David Eline, Founder of Health Compass today.
Our expertise helps you navigate the complex world of international healthcare with confidence.
Click Here to Schedule Your Meeting →
No obligation. Just clarity about your options and peace of mind about your healthcare future.
