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After the deductible has been met, the policyholder is responsible for a certain percentage of the bill is the definition of _____.

A. Copayment
B. Coinsurance
C. Premium
D. Deductible

User Amarghosh
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1 Answer

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Final answer:

The term that describes a situation in which a policyholder pays a percentage of the insurance bill after meeting the deductible is 'coinsurance'. Coinsurance differs from copayments and premiums and helps reduce moral hazard in insurance policies.

Step-by-step explanation:

After the deductible has been met, the policyholder is responsible for a certain percentage of the bill is the definition of coinsurance. This term refers to the arrangement where an insurance policyholder pays a set percentage of a loss, and the insurance company pays the remaining cost.

Unlike a copayment, which is a flat fee paid before receiving services, or a premium, which is the regular payment made for the insurance policy itself, coinsurance is directly tied to the actual costs incurred for services or claims.

The concept of a deductible represents the maximum amount the policyholder must pay out-of-pocket before the insurance company begins to cover expenses. Together, deductibles, copayments, and coinsurance reduce the moral hazard by ensuring that the insured party bears a portion of the costs, discouraging overutilization of insurance benefits.

User Michael L Watson
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