What is a deductible in terms of insurance?

A deductible in terms of insurance refers specifically to the amount of money that the insured is responsible for paying out-of-pocket before the insurance company begins to cover the costs for covered medical expenses. For instance, if you have a deductible of $1,000, you must pay that amount first for healthcare services before the insurer will cover any additional costs. This mechanism ensures that the policyholder shares in the risk and encourages prudent use of healthcare services.

The other options do not accurately define a deductible. Coverage involves the total protection a policy provides, while the premium is what you pay to maintain the insurance coverage. The fee for preventive care services is also separate and not linked to the deductible aspect of a policy. Understanding the concept of a deductible is crucial as it affects how much an insured individual must pay in a given situation before receiving benefits from the insurance coverage.