“A buyback deductible, also called a deductible buyback, can be an add-on to an existing insurance contract or may be purchased separately.” For example, it can be a method to buy down a high deductible health plan specific to certain specified conditions.
“Insurers generally use deductibles to eliminate their exposure to the first-dollar losses associated with a claim. In order for the insurer to accept a lower deductible, it would have to be financially compensated another way. In this case, the compensation is coming through a higher premium. This type of deductible is created through the payment of an incremental premium, which is used in lieu of the deductible that the insured would have to pay if a claim is made.”
“A buyback deductible is an insurance contract provision that allows an insured party to pay a higher premium to reduce or eliminate the deductible that the insured would have to pay if a claim is made. A buyback deductible, also called a deductible buyback, can be an add-on to an existing insurance contract or may be purchased separately” – JULIA KAGAN
