How is a deductible different from a premium?

Answer 1

Both terms relate to insurance, but mean different things.

A deductible is the amount of money that the insured has to pay toward a covered occurrence before the insurer's obligation to pay anything is triggered. For example, if an auto policy had a $250 collision deductible, the insured would be responsible for the first $250 in repair costs; the insurer would pay the rest. The theory is the same in the case of health insurance.

A premium is the amount of money that the insured pays in return for insurance coverage. In other words, it is the price of the policy. It is generally payable on a monthly, quarterly, semi-annual or annual basis.