Aggregate Deductible in Health Insurance

Imagine chatting with a friend about health insurance and suddenly discovering that they pay 40% less in premiums for the same plan you both have. Sounds impossible, right? But this happens more often than you’d think, thanks to features like aggregate deductibles.

While these discounts make it seem like a no-brainer, there are a few considerations you should be aware of. 

In this article, we break down what an aggregate deductible is, how it affects your premium, and whether it actually makes sense for you.

Types of Aggregate Deductibles

1. Mandatory Aggregate Deductible

Some plans impose a mandatory deductible with no option to opt out of it. This is present in many super top-up plans (e.g. Care Supreme Enhance Super Top-up). 

2.  Voluntary Aggregate Deductible (Optional)

You may choose to add it to pay a lower premium. This is usually decided at purchase. You can also change or remove it at renewal, subject to underwriting by the insurer (e.g. HDFC Ergo Optima Secure). 

Note: 

• Some Super Top-up plans (like Aditya Birla’s Super Health Plus Top-up) offer a waiver of the aggregate deductible amount. Alternatively, the insurer allows you to move to an indemnity plan without a deductible in the future (subject to the terms and conditions of the policy). 
• Some plans also offer a ‘Per Claim Deductible’, where you need to pay a specified amount for every admissible claim, post which the insurer covers the rest. Aditya Birla Activ One MAX and many other ‘Top-Up’ plans offer a per-claim deductible.

How Does Aggregate Deductible Work in a Health Insurance Policy? 

1. In Base Health Insurance Plans

If your base health plan has an aggregate deductible, you must cover all medical costs in a given policy year (up to the deductible amount before your policy kicks in).

Example: You have a ₹10 lakh health plan with an aggregate deductible of ₹50,000. Your first hospital bill is ₹30,000, which you pay out of pocket. A few months later, another bill came in for ₹30,000. 

Now, the total expense for two hospitalizations becomes ₹60,000, which exceeds the decided deductible amount. 

Hence, your insurer covers an additional cost of ₹10,000. Any further claims in the policy year would also be covered for you since the deductible amount was met for the year. 

HDFC Ergo Optima Secure and  SBI Super Health Platinum Infinite plan are some great examples of base plans with a deductible option.  

2. In Super Top-Up Health Insurance Policies

A super top-up plan gives you extra coverage, but it only activates after your total medical expenses exceed the aggregate deductible in a given policy year. While it has its disadvantages, this set-up works best when you already have a base plan available.

Example: You have a base policy of ₹5 lakhs and a super top-up of ₹20 lakhs with a ₹5 lakh aggregate deductible. Your first hospital bill is ₹3 lakhs which you pay by yourself or via your base plan.

A few months later, you get another ₹3 lakh bill. Now that your total expenses cross ₹5 lakhs and exceed the base policy cover, your super top-up takes over and pays the remaining ₹1 lakh.

Care Supreme Enhance Super top-up, ICICI Lombard Activate Booster Super Top-Up, and Aditya Birla’s Health Super Health Plus Top-up are good examples of a Super Top-up plans with a deductible.

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Ditto’s Take: Is Aggregate Deductible Good for You? 

An aggregate deductible can be a smart choice if you have little to no pre-existing conditions (e.g., young adults and even older buyers). It works even better if you have a corporate plan or another policy that can handle smaller claims while your primary plan sits above the deductible.

However, if you have moderate to serious pre-existing conditions, and need medical care more often, an aggregate deductible may not be the ideal option. This also applies if you’re uncomfortable with the risk of a cashless claim being denied in certain situations.

For younger people, the premium savings after adding an aggregate deductible are too small to justify the added complexities.  Hence, we do not recommend adding it, unless necessary. 

The premiums shown above are for a ₹15 lakh cover under the HDFC Ergo Optima Secure plan for a 30-year-old and a 60-year-old male living in Delhi. 

Key Insights: A ₹25,000 deductible can cut premiums by roughly 25% at both ages. But the payoff differs. At today’s prices, a 30-year-old needs over 6 years to break even, while a 60-year-old can recover the same deductible in just over 2 years.

Conclusion

An aggregate deductible is simply a deal you strike with the insurer. As long as you know your base cover, your savings capacity, and the numbers (premium savings and payback period), you can use it smartly instead of being caught off guard.