What is deductible?
Deductible is the mount that an insurance holder may be required to pay out-of-pocket before an insurance company covers the cost of healthcare. For instance, in case of an accident resulting into a total hospital expense of $2, 000 and the deductible is $300; the patient may first have to satisfy the latter amount in order to be able to be covered. If the medical expenses are only $300, the policyholder needs to pay such amount and the insurance will not pay anything. However, coverage will apply for the succeeding hospitalization. In case wherein the medical expense is higher than the deductible, then the policy owner pays the extra cost.
There are several terms that are associated with deductible like after deductible. This refers to the sharing cost of a certain service after you have satisfied your deductible. No deductible means you do not have to pay the deductible but you may be required to satisfy the co-pay. Before deductible refers to the cost of service before you meet your deductible. The deductible is often read together with the co-pay, co-insurance, and out-of-pocket limit. It may also vary depending on the types of health insurance.
The deductible is basically provided in an insurance policy. It sets the cost of a covered expense that the insurance holder will pay before the latter gets covered for a certain medical service. It is often quoted as fixed amount. Depending on different policies, the deductible can apply per covered incident or per year. Health insurance policies where incidences are not easy to demarcate, the deductible is applied per year.
Deductible also applies other types of insurance such as home and auto insurance. In this case, the deductible is applied per claim basis. Other types of deductible reimburses certain amount in event of insurance claims such that of a boat or yacht insurance.