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Old 17.04.2009, 14:53
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Deductible / Excess / Franchise [health insurance] - which is the best one to choose?

I have noticed quite a few posts on here recently about which deductible is the best one to choose so I thought it might be helpful to start a proper thread dealing only with this issue.

If you read through all the threads and agree with everyone, then every single deductible seems to be the best one to choose!

You have to be careful how you calculate which deductible is the best one for you. Taking into consideration the 10% quota ("quote-part") and how often you need to see a doctor/take medication etc.

This is the best way I've found to work out so get yer calculators out!

Let's take 3 different deductibles : 300.-, 1'500.- and 2'500.-

Let's take premiums for Vaud zone 1 with the company Vivacare without accident, for adults (26+).

Monthly premiums :

300.- = 333.50
1'500.- = 257.30
2'500.- = 193.90


Example 1.

You have to visit the doctor a couple of times a year and take regular medication. Your annual bills come to 1'000.-.

1. You have a 300.- deductible. You will have to pay :

- premiums = 333.50 x 12 = 4'002.-
- your deductible = 300.-
- 10% of what is remaining = 70.- (1'000 - 300 = 700 x 10% = 70.-)

Total = 4'372.-

2. You have a 1'500.- deductible. You will have to pay :

- premiums = 257.30 x 12 = 3'087.60
- you have not gone over your deductible so you'll have to pay the full 1'000.- medical bills = 1'000.-
- no 10% (haven't gone over deductible)

Total = 4'087.60

3. You have a 2'500.- deductible. You will have to pay :

- premiums = 193.90 x 12 = 2'326.80
- as above, = 1'000.-
- no 10%

Total = 3'326.80

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In this case, you would be better off with a 2'500.- deductible.
Despite your 1'000.- worth of bills, you are still saving 1'045.20 p.a.

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Example 2.

You have a catastrophic year with bills coming left, right and centre totalling 100'000.-

1. You have a 300.- deductible. You will have to pay :

- premiums = 333.50 x 12 = 4'002.-
- your deductible = 300.-
- 10% of what is remaining = 700.-
(fortunately, this is maxed out at 700.-)

Total = 5'002.-

2. You have a 1'500.- deductible. You will have to pay :

- premiums = 257.30 x 12 = 3'087.60
- your deductible = 1'500.-
- 10% of what is remaining = 700.-

Total = 5'287.60

3. You have a 2'500.- deductible. You will have to pay :

- premiums = 193.90 x 12 = 2'326.80
- your deductible = 2'500.-
- 10% of what is remaining = 700.-

Total = 5'526.80

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In this example, you would be better off having a 300.- deductible.

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If example 1 is a typical year for you but you know that example 2 could happen one day, you have to think, "is it worth it for me to save over 1'000.- p.a. to lose 526.- the year that something major happens?"
If example 2 happens in your 5th year of insurance, you will have saved over 4'000.- in the first 4 years to then lose 526.-. You are still saving money over all.

You can take any company and any deductible and work it out for yourself. Why not try other examples? "What would happen if I have 2'000.- worth of bills?" etc.

If you have just arrived in Switzerland and are on regular medication, ask a local pharmacy how much your medication costs and for how many. Work out how much this would cost you annually and do your sums. It doesn't take long and it could save you money so I think it's worth it.

Ideally, if you go for a big deductible, you should put that amount in a second bank account in your name and keep it there for emergencies. The financial risk of having taken a bigger deductible is therefore covered rather than giving it to your insurance company every month.


Remember, you can change your deductible each year if you wish. So, you can use this to your advantage.
Say you find out in September 09 that you have to go in to hospital for an operation in February 10, you should lower your deductible to 300.- for 2010.
If you have a low deductible and the chances of you having to visit doctors etc. the following year is slight, increase it.

You have to let your health insurance provider know by November 30th with a registered letter that you wish to change your deductible for the following year.

N.B. There is no deductible on supplementary cover with most companies so osteopaths for example, do not count towards your deductible. This is only for basic cover.

-------

Hope this clarifies things and hasn't given you too much of a headache!

If you have any questions, as always, just let me know
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