Tennessee Insurance Exam 2025 – 400 Free Practice Questions to Pass the Exam

The initial portion of a covered major medical insurance expense that the insured is required to pay is known as the deductible. The deductible is a specified amount that the policyholder must pay out-of-pocket before the insurance company starts to pay for covered expenses. This mechanism helps to lower the overall cost of premiums because it requires individuals to share the financial responsibility for their healthcare costs.

In a typical major medical insurance policy, the deductible applies annually and could vary based on the specifics of the plan. Once the deductible is met, the insurance company begins to cover a percentage of the remaining costs, while the insured may also be responsible for co-insurance or co-payments depending on the terms of the policy. Understanding the deductible concept is crucial for policyholders as it affects the overall out-of-pocket expenses they may incur during the policy year.