deductible

Definition

Plain language

The amount you pay out of your own pocket before an insurance plan starts covering costs.

Also called: deductibles

Why it matters: It is one of the main dials that separates a cheap plan from an expensive one, so an assistant comparing insurance options can shift real money by quietly preferring plans with different deductibles.

For example, with a $2,000 deductible you pay the first $2,000 of your medical bills yourself, and the insurer only starts paying after that.

Heard on the show

“A wealthy user might prefer the direct flight, and the lower deductible.”