Deductible vs Premium Calculator

How it is calculated

The tool adds your premium to the part of the claims you would pay yourself: out of pocket = smaller of (expected claims, deductible) and total cost = annual premium + out of pocket. Annual premium is the total you pay in a year in dollars, deductible is the amount you pay before cover starts, and expected claims is the total cost of the covered events you expect during the year. If claims are below the deductible you pay all of them; once they exceed it, your share is capped at the deductible. The tool assumes the insurer then pays everything else: it has no co-insurance, no co-pays, no out-of-pocket maximum and no excluded items. Run it once per plan and compare the totals. Zero claims gives a total equal to the premium; negative or empty values return no result.

Common mistakes

• Comparing only the premiums or only the deductibles. A low premium with a high deductible can cost more in a year with large claims, so compare the total.
• Entering the amount the insurer would pay as expected claims. The field is the total cost of the claims; the tool works out your share itself.
• Using one expected-claims figure for plans that cover different things. If one plan excludes an item, remove its cost from that plan's claims.
• Assuming a single average year. Run a good year, a typical year and a bad year, because the plan that wins at low claims often loses at high claims.
• Forgetting co-pays or co-insurance. They are not modelled, so the real cost can be higher than the tool shows.