Definition of "Flat deductible"

Same as term Deductible: amount of loss that insured pays in a claim; includes the following types:

  1. Absolute dollar amount. Amount the insured must pay before the company will pay, up to the limits of the policy. The higher the absolute dollar amount, the lower the premium.
  2. Time period amount (Elimination period/Waiting period). Length of time the insured must wait before any benefit payments are made by the insurance company. In disability income policies it is common to have a waiting period of 30 days during which no income benefits are paid to the insured. The longer this time period, the lower the premium.
The consumer would be well advised to select the highest deductible (by dollar amount and/or time period) that he/she can afford. First dollar coverages are very costly. A high deductible allows the insured to self-insure expected losses those of high frequency and low severity.

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