Health Insurance 101: Understanding deductible and co-insurance

Your guide to deductible, co-insurance and how you can reduce these out-of-pocket expenses.

Industry-specific terms and jargon in your health policy contract can make it hard to understand exactly what your coverage entails. And because many people leave the technicalities to their trusted insurance agents, it can be baffling or disappointing when medical claims get rejected or payouts are lower than expected. If you don’t want to be caught off guard by huge bills for your medical treatments, it’s important to understand how your MediShield Life Plan or Integrated Shield Plan works.

For starters, familiarise yourself with two common health insurance terms: “deductible” and “co-insurance”. Simply put, these are your out-of-pocket expenses for covered medical care that isn’t paid by your insurer.

Understanding these features and knowing how they work together helps you make the right medical and financial decisions, as they directly impact the amount you spend on top of your insurance coverage.


A deductible is the initial amount you have to pay for eligible medical claim(s) made in a policy year, before you can start receiving any payouts from your insurance policy. For example, if your Integrated Shield Plan includes an annual deductible of S$3,500, you must pay the first S$3,500 for your insured medical services before your Integrated Shield Plan starts to pay for your subsequent medical expenses. Deductibles are included in Integrated Shield Plans to screen out small claims as these plans are designed to cover large hospital and treatment bills. The amount of deductible payable differs with each insurer and depends on the plan you’ve signed up for.


Think of co-insurance as splitting the cost of your covered medical expenses with your insurer. The amount you have to pay under your Integrated Shield Plan is a fixed percentage and only kicks in once you have met your deductible. For instance, if your hospital bill is S$20,000 and your Integrated Shield Plan has a S$3,500 annual deductible and a 10% co-insurance feature, you’ll first have to pay the S$3,500 deductible, before paying 10% of the remaining eligible cost (S$16,500) which works out to an additional S$1,650. Your insurer will pay the remaining of the total eligible medical cost.

To help lighten your cash outflow, you can also tap onto your MediSave to pay for the deductible and co-insurance, up to specified limits, if they are not covered by your health insurance.

Why are these out-of-pocket costs necessary?

MediShield Life Plan and Integrated Shield Plan in Singapore include deductibles and co-insurance as these features encourage everyone to play a more active role in managing their medical care costs and preventing over-consumption of medical services. These features help to ensure healthcare costs and health insurance premiums remain affordable and sustainable for all Singaporeans in the long term.

How to reduce out-of-pocket expenses?

There are a few ways to reduce your out-of-pocket costs. For instance, opting for panel specialists within your health plan’s provider network may give you access to preferred consultation rates. Requesting for pre-approval of your claims before going for any planned medical treatments is also recommended as it provides you certainty of your claim outcome.

There is also the option of adding on a rider plan to your Integrated Shield Plan to reduce your out-of-pocket expenses. One of the benefits of a rider plan is to provide coverage for deductible and co-insurance, subject to limits. It is to be noted however, that as of March 2018, the Ministry of Health requires all new rider plans to include a co-payment of 5% or more so that everyone takes on a shared responsibility for their healthcare needs. Opting for panel specialists and requesting for pre-approval or seeking treatment at a restructured hospital can allow you to enjoy lower co-payment with your rider plan.

Knowing that you won’t have to deal with unwanted financial surprises can be reassuring in times when you just want to focus on your health. 


Need to see a medical specialist?

There are more than 300 specialists across various disciplines on Aviva’s panel. Start your search here or download Aviva ClaimConnect app from the Apple App Store or Google Play store

You can also ask your specialist to help you with pre-approval of your claim before going for your planned hospitalisation and medical treatment.  

Alternatively, speak to your financial adviser representative or 

give us a call to book an appointment

1800 8800 880

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