Deductible

/dɪˈdʌk.tɪ.bəl/

Meaning & Definition

noun

A specified amount that must be paid out of pocket before an insurance policy begins to cover costs.

She had to pay the deductible of $1,000 before her health insurance covered the remainder of her medical bills.

An expense or amount that can be deducted from gross income to reduce taxable income.

In some cases, mortgage interest is considered a deductible expense.

adjective

Able to be deducted from a total or claimed as an expense.

Certain business expenses are deductible on your tax return.

Referring to the amount that must be paid before an insurance company will pay a claim.

The car insurance policy has a $500 deductible, meaning you pay the first $500 of any claim.

From the Latin 'deductibilis', meaning 'able to be deducted'.

high deductible

A deductible that is significantly more than usual, often associated with lower monthly premiums in insurance.

deductible expense

An expense that can be deducted from income before tax is calculated.

deduction

The amount that is subtracted from a total.

insurance

A practice or policy providing protection against financial loss or risk.

Out-of-pocket

You’ll have to cover the out-of-pocket costs until you hit your deductible.

Insured's share

You’ll need to pay your insured's share before the insurance kicks in.