Deductible
The amount you pay out of pocket before your insurance begins to pay.
What does deductible mean?
A higher deductible usually means a lower premium, and vice versa. With health plans, the deductible is the threshold after which the insurer shares costs; high-deductible plans pair with HSAs.
Related terms
Deductible — frequently asked
How does an insurance deductible work?
The deductible is what you pay out of pocket before insurance starts covering a claim. With a $1,000 deductible on a $5,000 claim, you pay $1,000 and the insurer covers the rest, subject to the policy terms.
Should I choose a high or low deductible?
A higher deductible lowers your premium but means more out of pocket when you claim — good if you rarely file and have savings to cover it. A lower deductible costs more monthly but cushions you against a big surprise bill.