What does the term "deductible" refer to in insurance policies?

The term "deductible" refers specifically to the amount that a policyholder is required to pay out of their own pocket before the insurance company starts to cover any claims. This means that the insured must incur costs up to this predetermined level during a coverage period, after which the insurer begins to provide benefits for covered medical expenses.

For instance, if a health insurance policy has a deductible of $1,000, the policyholder must pay that amount in eligible medical expenses each year before the insurance starts to pay for additional costs. This mechanism is a crucial part of many insurance plans, encouraging policyholders to take on some of the financial responsibility for their healthcare expenses and to help keep premium costs lower.

The other terms mentioned in the options refer to different aspects of insurance. The total amount paid for premiums (the first option) relates to the cost of maintaining the policy itself rather than out-of-pocket expenses incurred before the benefits kick in. Copayment fees (the third option) are fixed amounts the insured pays at the time of service, unrelated to the deductible. The insurance company’s share of the claim payment (the fourth option) describes how costs are covered once the deductible has already been settled, rather than the costs incurred before insurance benefits apply.