Deductible 'Carry-Over'

A deductible 'carry-over' is a feature in insurance policies that allows a policyholder to apply the amount of their deductible paid in the last few months of the policy year to the first few months of the following policy year. This feature is most commonly found in health insurance policies.

For example, let's say a person has a health insurance policy with a $1,000 deductible and a deductible carry-over feature. In November of the current policy year, the person incurs a medical expense of $1,500 and pays $1,000 towards their deductible. Since there are only two months left in the policy year, the remaining $500 of the deductible is not fully met before the end of the policy year. With the deductible carry-over feature, the remaining $500 of the deductible is carried over to the next policy year, meaning that the person only has to pay $500 to meet their deductible for the new policy year.

Key features of a deductible carry-over include:

• The deductible carry-over feature applies to specific types of insurance policies, most commonly health insurance policies.
• The amount of the deductible that carries over to the next policy year is typically limited to a certain amount.
• The deductible carry-over feature can be beneficial to policyholders who have incurred significant medical expenses towards the end of the policy year, as it can reduce their out-of-pocket costs in the following policy year.