Which insurance term describes a cumulative payment by the policyholder before claims are paid by the insurer?

The term that describes a cumulative payment made by the policyholder before the insurance company pays any claims is the deductible. A deductible is an amount specified in an insurance policy that the insured must pay out of pocket before the insurer will start to cover expenses. This helps to reduce the number of small claims made and encourages the policyholder to take some financial responsibility for their healthcare or other covered costs.

Understanding the role of a deductible is crucial in budgeting for insurance expenses. It directly impacts how much the policyholder will need to pay before they receive any benefits from their insurance, making it a significant factor in policy selection and financial planning.