What Is a Deductible
The term deductible is often used in insurance policies. Deductible is an amount of money paid by the insurance company to the policy holder in case of any claim regarding accidental cases. It can be defined as the amount of money expenses payable to the person who holds an insurance policy. The insurance company is responsible to offer that money before the payment of any kind of expenses. The fixed amount of money to be subjected for deductible has been mentioned in the policy earlier.
The amount of deductible is paid by the insured previously. In this way it can be said that the amount of deductible will be higher to pay less premium amount per year. Deductible and annual premium influence each other in a reciprocal order. Moreover, in cases of insurance where the conditions cannot be delimited, a provision of paying deductible per year can be introduced in the insurance policy.
There are some particular conditions for the payment of deductible. Some examples of such kind of conditions and payment terms are as follows:-
- Most of the health insurance policies bear the condition of paying a fix amount of deductible per annum in case of serious health problems. In addition, the deductible is not subjected to be paid for regular health checkups and routine meetings with the doctor.
- In case of travel insurance, the insurance company will be liable to pay the amount of expenses to recover the damage of vehicle. In this claim, the extra expended amount is also added in the basic deductible amount.
- Typically, the damage or loss of the vehicle because of accident, theft etc. is subjected to get the claimed amount by the insurer. The insured party can ask for total deductible amount along with the expenses regarding damage of automobile.
- In an industrial insurance, the deductible is defined in the form of percentage for risk cover in a variety of accidental cases. The deductible amount can be discussed in the policy regarding occurrence of industrial destruction due to natural calamities also. Fire and theft conditions are also involved in insurance to claim for the deductible.
Deductible amount can be different for various cases and accidental cases. For instance, a factory of plastic wares can commit insurance with varied deductible for fire incidence, sudden accident and natural calamity.
Apart from these cases, there are also reimbursement planning run by insurance company according to which the amount of deductible can be reimbursed in the condition of health, travel and accidental claim. Thus, it is clear that deductible is the amount which is deducted from the amount of claim done by the insured party on insurance company.