Generally, the higher the deductible, the lower the insurance premium. True or false?
Understand the Problem
The question is asking whether the statement about insurance deductibles and premiums is true or false. It suggests a relationship between the deductible amount and the insurance premium costs.
Answer
True
The final answer is True
Answer for screen readers
The final answer is True
More Information
Generally, insurance policies with higher deductibles are associated with lower premiums. This is because a higher deductible means the policyholder assumes more risk by agreeing to pay more out-of-pocket before insurance coverage begins.
Tips
A common mistake is to confuse the deductible with the premium payment. The deductible is an amount you pay out-of-pocket on a claim before insurance covers the rest, whereas the premium is the regular payment for maintaining the insurance policy.
Sources
- Understanding Your Insurance Deductibles - iii.org
- Premium vs. deductible: The differences that can impact your budget - healthpartners.com
- What Is A Car Insurance Deductible and How Does It Work? - nationwide.com
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