Which type of health coverage frequently uses a deductible?

• A. Dental indemnity plan
• B. Long-term care insurance
• C. Major Medical policy
• D. Medicare Advantage

Answer: (C)

A deductible is the amount you pay out of pocket before your insurance starts paying, which helps share risk and keep premiums lower. Major medical policies are built around this idea: you pay the annual deductible first, and once that amount is met, the plan typically pays a large share of remaining eligible expenses (often with coinsurance) up to the policy’s limits. This structure is common because it addresses high-cost, broad medical care and helps control small, frequent claims by requiring some upfront payment from the insured.

Dental indemnity plans usually rely on fixed co-pays and service-specific benefits with annual maximums rather than a single annual deductible driving most claims. Long-term care insurance uses an elimination period (a waiting period before benefits start) rather than a deductible. Medicare Advantage plans may have deductibles for certain services, but they are not defined by a deductible as the primary feature the way major medical plans are.