How to Choose the Right Excess for Your Health Insurance?
An excess is the fixed cash amount you pay towards a claim. The higher the excess, the lower we can set your premium. You must choose one when you first apply for your health plan. You pay the excess for each medical condition, per period of cover. In this article we cover everything you need to know about excess and how it applies to your international health insurance cover.
What is an excess?
Your excess is the amount you pay towards your medical bills before your health insurance plan kicks in. (Expats from North America might be more familiar with the term ‘deductible’. Excesses are slightly different from deductibles, but they exist for similar reasons.)
Let’s say your health plan has a US$50 excess. You pay your insurance premium as usual, and you go about your life safe in the knowledge that you have cover for private healthcare. When you visit a hospital or doctor and you incur a charge for consultation or procedure, you’ll pay the first US$50 of your bills. After that first US$50, your health plan will pick up the tab for your eligible medical treatment.
What’s the point of health insurance if I have to pay the bills?
Excesses might seem a little strange at first. Isn’t medical insurance supposed to pay for your hospital bills?
Yes, of course, but that’s not quite the full picture. Excesses can help insurance companies and customers:
- Excesses help insurance companies reduce the amount of risk they’re exposed to by an insurance policy.
- In return, insurance companies translate that risk reduction into premiums savings for the customer buying the policy.
Health insurance companies receive millions of claims for medical treatment each year. Most of these claims are for relatively low-cost treatments such as doctor visits, specialist consultations and pharmacy prescriptions. These small claims certainly add up. Of course, a complex claim for cancer treatment at a private hospital can cost millions of dollars. But most of the claims that health insurance companies pay out to customers are for minor treatments.
An excess means health insurance companies pay out less for high-frequency but low-cost claims. Fewer claims save money for the insurance company. But it also saves time so claims advisers can focus attention on claims for serious, long-term medical treatment.
Most importantly, insurance providers ought to pass on the savings to customers. At William Russell, that’s the approach we take. We know that insurance doesn’t have the best reputation, but we’re doing our best to change perceptions. We’re completely transparent on how excesses work and how they can save you money.
Below, you’ll find information on our excess options and a couple of strategies for picking the right excess for your needs.
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What is a nil excesses?
When you first start thinking about health insurance, you probably just want a policy to pay for your private healthcare. So, what’s all this about excesses? Why have an excess if your excess is the amount you contribute to your private healthcare costs?
Counter-intuitively, not having an excess (known as ‘nil excess’) is unpopular with our members. Why? Having a nil excess means more expensive premiums.
The logic behind calculating premiums for health insurance is somewhat complicated, but most models start with a baseline (or ‘base premium’, as it’s known). When calculating base premiums, insurance companies’ price using the most basic version of their plans (i.e., a standard-issue plan with no optional benefits or other add-ons).
Insurance companies also tend to calculate base premiums using the nil excess. They calculate discounts for higher excesses against the standard, nil excess. On our plans, the difference in premium between the nil excess and the next highest available excess (US$15 per visit) can be as significant as 10%!
So excesses are nothing to be afraid of, and most of our members have one on their plan quite happily.
What is a ‘per visit’ excess?
The ‘per visit’ excess is the most popular type of excess in Dubai.
Your per visit excess is the total amount you’ll be out-of-pocket each time you visit a hospital or clinic.
For example, you choose a US$15 per visit excess. We won’t pay the first US$15 of medical expenses you incur during each visit to a hospital. After that first US$15, your plan covers you in full for all remaining treatment in that visit.
How do excesses work with direct billing for everyday medical care?
When you become a member, we issue you with a membership card that states your excess. When you attend a hospital or clinic in the UAE, just present the card and the clinic will know to charge you for the amount of your excess.
Notes on the health plans
You won’t find complete information for our plans on this webpage, nor the full T&Cs, limitations, and exclusions that would apply if you purchase one. You can find complete information in the plan agreement, which we suggest you read together with this webpage. All the benefits on this webpage are per member per period of cover, unless we state otherwise. We show the benefit limits in US dollars, but we can also denominate your plan in dirhams.