JagInsights › Glossary › Deductible
What is an insurance deductible?
A deductible is what you pay before insurance pays. How it trades off against the premium.
A deductible is the amount you pay out of pocket on a covered claim before the insurer pays. A higher deductible usually means a lower premium. A lower deductible usually means a higher premium.
Worked example
A health plan with a $2,000 deductible means you pay the first $2,000 of covered care that counts toward it. After that, copays or coinsurance apply until you hit the out-of-pocket maximum. The premium is the price of having the plan at all, paid whether you use it or not.
Why it matters
People pick the cheapest premium and then cannot pay the deductible. The plan only works if both numbers fit the cash you actually have.
Questions people ask
Is the deductible the most I will pay?
No. The out-of-pocket maximum is the usual ceiling for covered in-network care, and even that has exceptions. Read the summary of benefits.
Does a car-insurance deductible work the same way?
Same idea: you pay that amount on a covered claim, then the insurer pays the rest according to the policy. Liability claims can work differently than collision.
Should I raise my deductible to save money?
Only if you can pay that deductible from cash without a card. Otherwise the cheap premium is a loan waiting to happen.
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