The family deductible is the maximum amount of money that your family must pay in deductibles before the insurance company begins to pay. If your plan has a $500 deductible and you have five family members, you could potentially incur $2,500 of deductible expenses, assuming everyone ran up just $500 worth of claims. To avoid this, most plans have a family deductible limit equal to two or three times the individual deductible. So, the family mentioned above would only have to pay $1000 (2x) or $1,500 (3x) before the insurance company began to pay benefits. Expenses incurred beyond the family deductible limit would be eligible for reimbursement at the co-insurance percentage.

Some family deductibles specify that two or three family members have to meet the individual deductible completely. Others only require that the family, in aggregate, accumulate the family deductible limit before benefits are paid. Obviously, the requirement that individuals meet their deductible entirely is not quite as good as the cumulative family deductible provision. The family deductible is important because it can limit the total amount of deductible that can be charged to your family.

This document was last modified on July 27, 1999 by LMLeber

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