In which situation would "Coinsurance" typically apply?

Coinsurance is a cost-sharing arrangement commonly found in health insurance plans, where the insured pays a certain percentage of the medical expenses after meeting the deductible, while the insurer covers the remaining percentage. This system is designed to encourage the insured to share the financial burden of healthcare costs, which can help to manage overall healthcare spending.

In a coinsurance scenario, for example, if a policy has a 20% coinsurance provision, after the deductible has been paid, the insured would pay 20% of any further healthcare costs, while the insurer would cover the remaining 80%. This arrangement typically activates once the insured accesses healthcare services and begins taking advantage of their benefits.

The other options do not represent situations where coinsurance would apply. A policy with no deductible simply means that the insured starts sharing costs immediately without any initial out-of-pocket expenditures. Paying premiums annually pertains to payment frequency and does not directly relate to coinsurance. Lastly, reaching the out-of-pocket maximum means that the insured has paid enough in out-of-pocket costs that the insurer will cover 100% of additional expenses, which effectively negates the application of coinsurance for those subsequent costs.