A deductible is the amount of money you must pay out-of-pocket for covered services or losses before your insurance company begins to pay. It is a common feature in many types of insurance, including health, auto, and home policies.
Deductible
Definition
A deductible is the amount of money you must pay out-of-pocket for covered services or losses before your insurance company begins to pay. It is a common feature in many types of insurance, including health, auto, and home policies.
Example
If your health insurance policy has a $1,000 deductible, you must pay the first $1,000 of your medical bills yourself before your insurer starts covering subsequent costs.
Key Points
- 1Amount paid by the insured before coverage kicks in.
- 2Higher deductibles generally lead to lower premiums.
- 3Applies per claim or per policy period, depending on the type of insurance.
- 4A way for insurers to share risk with policyholders.
You Might Also Like
Beneficiary
A beneficiary is a person or entity designated to receive the benefits or assets from an insurance policy, will, trust, ...
Coinsurance
Coinsurance is the percentage of a medical bill you are responsible for paying after you've met your deductible. Your in...
Copayment (Copay)
A copayment, or copay, is a fixed amount you pay for a covered healthcare service at the time you receive it. The amount...
1099 Form
A 1099 form is a series of IRS tax documents used to report various types of income other than wages, salaries, and tips...