A lot of people have trouble figuring out their Insurance needs. It is absolutely true that almost everyone needs some type o f Insurance. People may think they that are too rich for insurance but that is never really true. Think about how much a certain celebrity has insured certain body parts for and you will get the picture.
So why do people buy insurance? Well, it is to cover an unforeseen event that could cause loss of health, life or property. It is to get monetary compensation for losses caused by most unforeseen events. Insurance is betting against yourself to buy peace of mind. If you are insured then you should be compensated if the event were to occur.
Insurance companies are not, however, in it for the public service opportunities. They exist to make money and that is their main motive. Private Insurance has to keep its shareholders happy and it cannot do that by paying off every single claim that comes its way. The goal of the Insurance Company is to give out as little as possible in claims and to take in as much as possible as premiums. In order to understand exactly how your particular policy works, what it covers and in what event is to read every single detail of your policy document including and especially the fine print.
So what is this deductible and premium? Well, a deductible is simply the amount of money that you would pay out of your own pocket should an unforeseen event occur. But you have insurance, so why should you pay out of your own pocket? You can choose the size of your deductible and that would affect the amount of your premium payments.
If you buy Health insurance and you get sick then you would have to go to the hospital. If your hospital bill is $500 and you had chosen a deductible of $100 at the time you signed up for the insurance then the insurance company will pay $400 to the hospital and you will have to fork out the $100.
The way deductibles affect premiums is simple. A premium is the amount of money you pay every month to buy the insurance cover. If you buy car insurance, then you will pay a certain amount of premium every month depending on how much insurance cover you buy. If your deductible is $1000 then you are willing to pay that amount in case you total your car, therefore your premiums would be lower than say if you were only willing to pay $10.
If you are a young person and you don't expect to get very sick very often but you still think you should have some health insurance, then you may want to pick a plan with a high deductible and lower premium to make it cheaper and easier for you to afford. If you get sick, then you will have to fork out the higher deductible but since the chances of that are lower than if you are an old person, it might be worth it for you.
Remember, these are just examples. Your best weapon against getting ripped off is to do a lot of research. So surf the web and learn as much as you can.