Is it better to have a high deductible or high coinsurance?

Question

Is it better to have a high deductible or high coinsurance?

Answer 1

I am a former insurance agent with Citigroup.

A high deductible reduces your cost per month - but if you get in an accident, you'll be spending more out of pocket to cover the accident.  

With insurance you also need to be thinking of your overall finances.  Cover your car as much as you can yourself and have the insurance cover as much as you can't afford to.

(THEN with what's left over?

Usually one of the best advices I can give to a young person is - go with the high deductible and lower payment and then SAVE the money you would have spent on FULL COVERAGE and invest it.  A great way to save is precious metals (I've been doing it myself for some years now and done exceptionally well with it).  The nice part is I can't run out and spend it like I can a dollar in my account or piggy bank, but I can liquidate it very quickly.  It's never worth nothing and if anything, it goes UP in value and I've got over twice in value now in precious metals what I ever spent on them.)

Answer 2

It is better to have a high deductible, especially for a young male. Have your company quote you with a low deductible and a high deductible. Usually if you save the difference in premium for a year it pays for itself. Put the money in a savings account and dont touch it. After you have reached your deductible amount it is just money SAVED. This is an excellent financial decision. Suzy Orman reccomends it too.

Answer 3

In my case, high deductible, because it allows me to contribute to an HSA (this is a special type of account that has tax advantages like an IRA, but is for medical stuff, not retirement).  Your situation may be different.

Answer 4

That would depend on your own financial situation.  You would have to take into consideration the Maximum out of pocket + deductible.  What could you afford if you had a catastrophic illness without financially devastating yourself?  

Lets say you chose a $5,000 deductible that covered 100% (co-insurance)  after deductible, your maximum out of pocket provided you stayed in network would be $5,000.  

The next choice would be a $500 deductible with 80% co-insurance up to $10,000 after deductilbe.  your maximum out of pocket provided you stayed in network would be $2,500 ($2,000 + $500 deductible).  

Is the price worth the savings?  What about if a copay is offered, that doesn't go towards any out of pocket, so if you had a illness that required a once a week visit to a physician at $20 copay.  You would be out another $1,040 that wouldn't count towards out of pocket.