what is deductible

A deductible is an amount paid out of pocket by the policyholder before an insurance provider will pay any expenses. Deductibles are normally provided as clauses in an insurance policy that dictate how much of an insurance-covered expense is borne by the policyholder. They are normally quoted as a fixed quantity and are a part of most policies covering losses to the policyholder. Depending on the policy, the deductible may apply per covered incident or per year. Deductibles are also used in health insurance plans, where they refer to the amount you pay for covered health care services before your insurance plan starts to pay. After you pay your deductible, you usually pay only a copay or coinsurance for covered services, and your insurance company pays the rest. Deductibles can be high or low, depending on your plan, and that may affect how you pay for health care costs. Deductibles are also used in tax purposes, where they refer to an expense that an individual taxpayer or a business can subtract from adjusted gross income while completing a tax form.