Deductible

A deductible is the portion of a claim you pay before the insurer pays anything. In health insurance it is often an annual threshold; in motor insurance there is usually a small compulsory deductible plus an optional voluntary deductible you can choose to lower your premium.

Opting for a higher deductible reduces your premium, because you absorb small claims yourself, but you take on more out-of-pocket risk. It suits those who can comfortably fund minor expenses and want cheaper cover for major events.

A deductible differs from a copay: the deductible is a fixed amount you cross before cover begins, while copay is a percentage you share on each claim. Top-up and super top-up health plans use a deductible above which the extra cover kicks in.