What does deductible mean?

A deductible is the amount of money you have to pay before your health insurer (or auto insurer or homeowners insurer) begins providing you with coverage. For example, if you have a $500 deductible, you will not receive any payments from your health insurer until you’ve spent at least $500. Deductibles normally reset annually, so you’d have to spend $500 per year on qualifying medical expenses in this example. Typically, the higher the deductible, the lower the cost of insurance. Some insurers have no deductibles, while others have deductibles equal to several thousand dollars (these are normally called “high-deductible” health plans).