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It’s the ultimate insurance debate: do you opt for high insurance premiums or high deductibles in an attempt to cut costs? Most people who choose higher premiums are looking to save money over time, while those who go for a higher deductible are trying to save some money in the moment. Here are the facts about both approaches:

Low deductible-high premium plan

A study carried out by the Kaiser Family Foundation in 2011 shows that, in the US, families pay a hefty price to cater for their health care costs. The cost averages at a whopping $15,073 to cover a family insurance plan. This amount is enough to land a brand-new 2012 Hyundai Elantra.

However, most families don’t pay the full amount because their employers pay a considerable portion of the premiums under the employer-sponsored health care plans. A report by the Bureau of Labor Statistics showed that private-sector employers paid up to 71% of their employees’ premiums. The public sector paid even more, at up to 73%.

Generally, low deductible-high premium plans make expenses easier to predict. They are the better option for many consumers, especially those that are planning to have children, have a chronic condition, take several medical prescriptions or play high-risk sports.

Low premium-high deductible plans

Most employers are switching to plans with lower premiums and higher deductibles in a bid to try and reduce the financial burden that results from high premiums. Such policies have been termed as “consumer-driven” and have been taken up by companies such as American Express, General Electric, and Wells Fargo.

While the plan’s lower premiums can leave more money in your pocket, it isn’t always the best choice. Auto insurance deductibles, for instance, can be twice the amount you pay in traditional low deductible plans. The plan suits people who can afford to pay for the deductible upfront within 30 days of receiving the bill if an accident occurs.

Deciding between the two approaches sounds like a gamble because you can’t predict what’s going to happen, but talking to a Texas low-cost insurance company like All Star Insurance can help. Get in touch today.