Asked by Ericka Johnson on Sep 24, 2024
Verified
To signal to your insurance company that you are a low risk individual,you should
A) Accept an insurance policy with a high deductible
B) Accept an insurance policy with a low deductible
C) Accept an insurance policy with no co-payments
D) None of the above
Insurance Company
A financial institution that provides various types of insurance policies to protect individuals and businesses against risk.
Low Risk
Investments or activities characterized by a minimal likelihood of losing financial or physical assets.
High Deductible
A health insurance policy with a higher out-of-pocket cost before coverage begins, often resulting in lower premiums.
- Recognize the role of deductibles, co-payments, and premiums in insurance policies.
Verified Answer
AC
Andrew Cheung4 days ago
Final Answer :
A
Explanation :
Accepting an insurance policy with a high deductible indicates to the insurance company that you are willing to take on a greater portion of the risk, which in turn lowers the premium cost for the insurance company. This can signal to the insurance company that you are a low-risk individual who is less likely to make frequent or frivolous claims. Choosing a policy with a low deductible or no co-payments does not necessarily indicate that you are a low-risk individual, as these policies are generally more expensive and may not accurately reflect your actual risk level.
Learning Objectives
- Recognize the role of deductibles, co-payments, and premiums in insurance policies.