Deductible

A deductible is an amount of money that you must pay out-of-pocket before your insurance company will begin to pay for covered medical expenses. The amount of your deductible will vary depending on the type of insurance plan you have. For example, a health insurance plan may have a deductible of $1,000, while a car insurance plan may have a deductible of $500.

There are two main types of deductibles:

• Incurred deductible: This is the amount of money you must pay out-of-pocket before your insurance company will begin to pay for covered medical expenses that you have already incurred.
• Annual deductible: This is the amount of money you must pay out-of-pocket before your insurance company will begin to pay for covered medical expenses that you incur during the year.

In addition to the two main types of deductibles, there are also a few other types of deductibles that you may encounter, such as:

• Coinsurance: This is a percentage of the cost of covered medical expenses that you must pay after you have met your deductible. For example, if your coinsurance is 20%, you will be responsible for paying 20% of the cost of covered medical expenses after you have met your deductible.
• Coordination of benefits: This is a provision in your insurance policy that specifies how your insurance policy will work with other insurance policies that you may have. For example, if you have two health insurance policies, your primary insurance policy will pay for covered medical expenses first, and your secondary insurance policy will pay for any remaining expenses.

It is important to understand how deductibles work before you purchase an insurance policy. By understanding your deductible, you can make sure that you have enough money saved to cover your out-of-pocket expenses.