Illinois Health Insurance Practice Exam 2025 – All-in-One Guide to Master Your Health Insurance Certification!

The term 'deductible' in health insurance refers to the amount that an insured individual must pay out of pocket for healthcare services before their insurance begins to cover costs. This means that if a person incurs medical expenses, they must pay for these expenses up to a specified amount, known as the deductible, before the insurance company starts to share the costs.

For instance, if your deductible is $1,000, you need to pay that amount for covered healthcare services before your insurance will start to pay its share. The concept of a deductible is crucial in insurance as it helps to reduce the number of small claims submitted to the insurance company and encourages individuals to be mindful of their healthcare spending.

The other options present different elements of health insurance: the maximum limit on payouts refers to a cap on what the insurer will pay over a period (not the deductibles), the fee for each service pertains to copays or coinsurance rather than a deductible, and the total costs incurred represents a more general term that doesn't specifically relate to how deductibles function.