How to Choose the Right Deductible for Your Visitors Insurance Policy? 

When selecting a visitors insurance policy, one of the essential decisions you will need to make is choosing the right deductible. The deductible is the amount you agree to pay out of pocket before your insurance coverage kicks in. It directly impacts the policy’s cost and the amount you may need to pay in case of a claim. 

So, what is a deductible? 

A deductible is a fixed amount that you agree to pay towards covered expenses before the insurance company starts paying. For instance, if you have a $500 deductible and incur medical expenses of $1,000, you will pay the first $500, and the insurance company will cover the remaining $500. 

Deductible per incident vs. Deductible per policy period 

With a per-incident deductible, you are required to pay the deductible for every new illness or injury that occurs during your trip. For instance, if you visit a doctor for a flu diagnosis, you will first pay the deductible after which the insurance company will cover the costs per the benefits of the policy. 

In contrast, in a per-policy period deductible or an annual deductible, you will pay the deductible once for the entire duration of your policy, which is the number of days you have bought the plan for up to one year. If your policy extends beyond one year, you will need to pay the deductible again after the initial one-year period. If you have bought the policy for 3 months and forget to renew, you will have to sign up for a new policy and meet the deductible again (if you already have) as this will be a completely new policy.  

Deductible affects premium 

The deductible you opt for significantly influences your policy premium, which is the amount you pay to purchase the insurance plan. A high deductible often results in a lower premium, while a low deductible leads to a higher premium. While some buyers may be enticed by the lower premium associated with a high deductible, it is essential to consider the potential financial implications. 

Selecting a high deductible may indeed reduce your premium cost, but it also means you will have to bear a substantial out-of-pocket expense if you need to use your insurance. On the other hand, a lower deductible may result in a slightly higher premium, but it provides more financial protection and peace of mind in the event of an illness or injury. 

For instance, let us consider a scenario where the premium for a $500 deductible plan is $400 for one month. If you decide to reduce the deductible to $250, the premium increases to $500. Although there is a $100 difference in premium costs, you are saving $250. 

It is advisable to weigh the trade-offs between premium costs and potential out-of-pocket expenses. Choosing a deductible that aligns with your budget and provides sufficient coverage in case of emergencies ensures a well-rounded and financially secure travel insurance plan. 

Which deductible to choose? 

Selecting a deductible that aligns with your comfort level is crucial when purchasing a visitor insurance policy. As a deductible is a significant factor influencing the cost of visitor insurance, you must be comfortable and willing to pay the premium and deductible you choose. Most buyers opt for deductibles ranging from $250 to $500 for comprehensive insurance plans and $50 or $100 for limited insurance plans. Selecting a $0 deductible can lead to a substantial increase in premium cost, but again it boils down to the insurer’s willingness to pay a high premium. 

Remember, the deductible applies only when you utilize your insurance. If you never need to use your visitor insurance policy, there is no need to satisfy the deductible. It is only when you require medical treatment that the deductible becomes relevant. As such, it is important to strike a balance between premium costs and potential out-of-pocket expenses, ensuring you have sufficient coverage while being financially comfortable during your trip. 

For more assistance regarding deductibles, feel free to contact Visitor Guard®.