What is the amount you must pay before you begin receiving any benefits from your insurance company?

• A. Premium
• B. Copay
• C. Deductible
• D. Coinsurance

Answer: (C)

The amount you must pay before benefits kick in is the deductible. This is the portion of your medical costs you cover yourself each year before the insurance starts paying for most covered services. It’s different from the premium, which is the regular amount you pay to keep the policy active, whether or not you use services. It’s also different from a copay, which is a fixed fee you pay at the time of a specific service, and from coinsurance, which is a percentage of the cost you pay after the deductible has been met. In many plans, preventive care may be covered before the deductible is met, but for most routine procedures, you’ll first pay toward the deductible, and once that amount is reached, the insurer shares the costs according to the plan’s coinsurance or copay rules.