Calculator

Deductible break-even calculator

Compare a low-deductible plan with a high-deductible plan using numbers from your own quotes or policy documents. This page supplies no premium, rate or price. You type everything, the result updates as you type, and nothing leaves your device.

The formula, in words

• Yearly premium difference = (low-deductible premium minus high-deductible premium) times the number of periods in a year (12 if you typed monthly premiums, 1 if yearly). A positive number means the high-deductible plan costs less per year as typed. A negative number means it costs more.
• Extra out-of-pocket risk = high deductible minus low deductible, never below zero. It is the additional amount you would pay yourself on one claim before the plan starts paying.
• Months of savings needed = extra risk divided by (yearly premium difference divided by 12). It shows how long the premium savings take to add up to the extra deductible. It only appears when both the savings and the extra risk are above zero.
• Cash buffer check = high deductible minus your buffer, never below zero. If the buffer is smaller than the high deductible, the calculator shows the part it would not cover.

How to read the result

A short break-even period means the premium savings catch up with the extra deductible quickly if you go claim-free. A long one means you would pay the higher deductible for a long time before the savings matter. Neither is a verdict. If you make a claim early, the high-deductible plan can cost more in that year. If you never claim, it can cost less every year. The calculator also shows one year with no claim and one year with a single claim equal to the full deductible, so you can see both ends side by side.

What this tool leaves out

It treats the deductible as the only cost on a claim. Real plans can add copayments, coinsurance, an out-of-pocket maximum, separate deductibles for particular perils such as wind or hail, a limit on what the policy pays, and rules about which providers or repair shops count. In health plans the out-of-pocket maximum caps what you pay in a plan year for covered in-network care, so the true worst case may differ from the deductible alone. It also ignores taxes, savings accounts attached to some health plans, the chance of a claim, and the fact that premiums can change at renewal. Read the policy or plan summary for those terms.

Use the same kind of coverage on both sides. Comparing plans with different limits or exclusions is not a like-for-like test, and our guide to comparing quotes explains what to hold equal.

Where this comes from

The definitions of deductible and out-of-pocket maximum follow common health plan glossaries (a deductible is what you pay for covered services before the plan begins to share costs; the out-of-pocket maximum is the most you pay in a plan year before the plan pays covered benefits in full). The advice to know your deductible before filing a claim comes from the National Association of Insurance Commissioners (NAIC) consumer guidance on homeowners claims. The break-even calculation is simple division that we wrote ourselves and tested in Node against hand-worked cases. For questions about your policy, contact your state insurance department, and see the NAIC consumer pages for general explanations.

Go deeper

• How to tell if a deductible is too high for your cash buffer
• Lower premium or lower deductible when money is tight
• How to choose a health insurance deductible

General information, not insurance or financial advice. Check your own policy, and your state insurance department and the NAIC for consumer help.