Insurance. Deductible. Premium.
Are these words starting to sound like the teacher from Charlie Brown? They’re all part of that insurance mumbo jumbo you find when you look up your coverage or gloss over your EOB.
But do you know what these words mean and how they work together? Let’s break it down:
- A premium is the amount you pay every month to maintain your coverage. One way that an insurance provider sets premium costs is by determining how likely someone is to file a claim. The higher the chance, the higher the premium.
- A deductible is the amount you’ll pay for treatment before your provider picks up a portion of the bill. Because the deductible is the guaranteed amount you’ll pay for a claim, a lower deductible often means the insurance company has to pay more of the claim.
How do the 2 work together? Generally, when you pay less for a deductible, your insurance company will offset the costs by increasing your premium. And vice versa.
What to consider for your own insurance:
- Consider a high deductible, low premium plan if you usually don’t see the dentist for more than the standard cleaning and exam. You’ll save more money by having lower monthly costs.
- Consider a low deductible, high premium plan if you have a history of oral health problems and need to see the dentist for something more than your 6-month check-up. This could allow you to pay less on each claim.