Deductible

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Deductible

An amount or period which must be deducted before an insurance payout or settlement is calculated.

Deductible

1. Able to be taken off of one's tax liability. See: Deduction.

2. In insurance, the amount that a policyholder must pay for a claim before the insurance company will make any payments at all. That is, if an insured event happens, the policyholder is responsible for covering damages up to a certain dollar amount, at which point the insurance company begins coverage. Some insurance policies have an annual deductible; that is, if two insured events happen in a given year, the deductible is only applied once. Other policies have a per event deductible; that is, the deductible applies each time a claim is made. Generally, the higher one's deductible is, the less one pays in premiums on the policy.

Deductible.

A deductible is the dollar amount you must pay for healthcare, damage to your property, or any other insurable claim before your insurance company begins to cover the cost of the bill.

For example, if you have a health insurance policy with an annual $300 deductible, you have to spend $300 of your own money before your insurer will pay whatever portion of the rest of the year's bills it has agreed to cover.

However, in some types of policies, the deductible is per event, not per year. Generally speaking, the higher the deductible you agree to pay, the lower your insurance premiums tend to be. However, the deductible for certain coverage is fixed by the insurance provider. That's the case with Original Medicare.

References in periodicals archive ?
In a section on Proportionate Contribution to Total Risk, the current authors demonstrate that the proportionate contribution of the parent's own risks to the parent's total risk (including the outside risks underwritten by the captive) is the relevent measure in determining the tax deductibility of premiums paid to the captive.
When the special rules for deductibility of expenses from meetings abroad do apply, the rules may not be difficult to meet.
The IRS recognized, however, that if an unrelated insurer retained any of the risk, that portion retained by the insurer did constitute risk shifting and the deductibility for that portion of the premium would be allowed.
Even with all the stars in the night sky seemingly aligned, MI tax deductibility was cut from the tax bill as conferees traded and bartered tax cuts to reconcile the differences between the Senate and House packages.
Grassley has supported the tax deductibility of long0term care insurance, and Dodd has sponsored the Assisted Living Tax Credit Act, which would establish an assisted living tax credit program similar to the low-income housing tax credit.
This legislation increases the deductibility limit to 140% of current liability, allowing plans to save more for future retirees and avoid future funding shortfalls.
The tax deductibility of medical insurance premiums depends on the tax status of the payer of these costs, as follows:
It is important to understand the rules regarding the deductibility of long-term care insurance.
With the promulgation of the American Jobs Creation Act of 2004 (AJCA), the deductibility of expenses for the personal use of an employer-provided aircraft has been severely limited.
Abandon or substantially narrow the Reasonable Expectation of Profit (REOP) test included in draft legislation clarifying the deductibility of interest and other expenses.
As for the deductibility of the compensation payments, the court said it depends on whether they are prohibited golden parachute payments.