What is a "deductible"?
A deductible is an amount of money you're gonna pay before the insurance kicks in. So, for example, if you have a health insurance policy and it has a $5. deductible, basically the insurance company's gonna make you pay all that first $500, and then they'll start working. The reason they have these deductibles is that it keeps the cost down. As an example, if you have a $2,000 deductible, it's going to be a lot less expensive premium than if you have a $500 deductible. If you have a $2,500 deductible or a $4,000 deductible, the insurance company says, "We have a customer who is willing to take some of the risk on their own". Now, for a person who's very healthy and rarely ever goes to the doctor, a high deductible makes a lot of sense. Some people save thousands and thousands of dollars having high deductibles. If you're an employee, though, working for an employer, you don't want a high deductible. You want the lowest deductible because the employer might be paying 100%. If you're self-employed and you're working on your own, you have to ask yourself, "is it worth paying the extra premium to have a very low deductible when you've been so healthy all these years?" The main thing that you should really be looking for in a health insurance policy is what's going to happen if you have a catastrophe. My opinion is if you have a $1 million claim, God forbid, who cares about a $5.000 deductible or a $1,000 deductible or $2,000 If the insurance company pays 98% of your claim or 99.9% of your claim, it's all that you really should be looking at.
