What does deductible mean?

• It refers to the cash you are required to pay when contracting a life insurance policy, because only after agreeing to pay this sum will the insurance companies cover for the remainder of the incurring expenses. You need to be careful in the case you are required to pay very small premiums for a policy, because that most of the times means the required deductible is very high.


• It may also refer to the sum of money which is taken away from one’s gross income so that tax paying will be applied on a smaller amount

Deductible explained

If the deductible you are required to pay for your life insurance policy is set at $500, and due to an accident you suffer you’d have to pay for medical care, treatments and other tests a sum of $1,000, this scenario supposes you firstly pay your $500 deductible with the rest of the costs being supported by the insurance company. However if your medical care’s costs happens to be exactly an amount of $500, that would mean the insurance company need not pay for anything because the sum equals exactly the deductible you have to pay for.

Moreover, medical care related payments and monthly incurring expenses such as a mortgage are all examples of expenses you can actually use as a tool to lower the sum for which tax is being applied.