What does deductible mean?
A deductible is, above all, an insurance term: the fixed amount of money a policyholder must pay out of their own pocket before an insurer starts covering costs on a claim. Someone with a $2,000 auto deductible who suffers $6,000 in damage will receive payment only for the $4,000 beyond that threshold. Higher deductibles usually mean lower premiums, shifting more risk onto the insured. The word also functions as an adjective, most often describing expenses that are 'tax-deductible' — that is, legally allowed to be subtracted from taxable income, thereby reducing the tax owed. Derived from the Latin deducere, 'to lead away', it entered English in the early modern period with the general sense of 'capable of being deducted'. In everyday speech the noun dominates, particularly in the United States, where conversations about healthcare routinely turn to whether one has met one's deductible.
In insurance, the amount that a policyholder must pay toward a claim before the insurer contributes.
"Because she hadn't yet met her deductible, the entire cost of the MRI came out of her own pocket."
Capable of being deducted, especially from taxable income.
"Interest on the business loan is fully deductible against company profits."
Used when referring to multiple policies or plans, each with its own deductible amount.
"High-deductible plans have become increasingly common among employers offering health benefits."
That word you only meet when something goes wrong: your 'deductible' is literally what gets 'led away' from the bill before your insurer steps in.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Etymology of deductible
Deductible derives from the Latin verb deducere, meaning 'to lead away' or 'to draw down', formed from de- ('away') plus ducere ('to lead'). It entered English via the adjective-forming suffix -ibilis, giving the sense 'that which can be led away or subtracted'. The word has been used since at least the seventeenth century in the general sense of an amount capable of being deducted, and its specialized insurance sense developed later alongside modern actuarial practice. It shares its root with words such as deduce, deduction, induce, and produce, all ultimately tracing back to ducere.
Related word forms
How deductible is actually used
The noun sense is overwhelmingly common in American English, especially regarding health and auto insurance; British English more often uses 'excess' for the same concept. As an adjective it is most frequent in financial and tax contexts, typically as part of the compound 'tax-deductible'.
Easily confused with deductible
'Deductible' is the standard spelling for both the noun and adjective in modern English; 'deductable' is a common misspelling, though it appears occasionally in legal texts.