What is the specified amount of money that the insured must pay for covered medical expenses before insurance begins to pay?

The specified amount of money that the insured must pay for covered medical expenses before the insurance company starts to pay is known as the deductible. When an individual has a deductible, they are responsible for covering a predetermined amount of their medical costs out-of-pocket. Only after the deductible is met will the insurance provider begin to cover its share of the costs according to the terms of the policy. This mechanism helps to mitigate the number of small claims and encourages policyholders to be more mindful of their healthcare expenditures.

In contrast, a co-pay is a fixed amount that the insured pays for specific services, typically at the time of service. The premium refers to the amount paid by the policyholder to maintain the insurance coverage, which must be paid regardless of whether or not any claims are made. Exclusions are specific conditions or circumstances that are not covered by the insurance policy. Understanding the role of each of these terms is essential for effective financial planning concerning healthcare costs.