Question

A fixed-dollar amount the subscriber must pay each year before the insurer begins to cover expenses is the:

a. Copayment
b. Deductible
c. Premium
d. Co-insurance

Answer 1

A deductible is the fixed-dollar amount that the subscriber must pay each year before the insurer begins to cover expenses. Deductibles reduce moral hazard by requiring the insured party to bear some of the costs before collecting insurance benefits.

Step-by-step explanation:

The correct answer is b. Deductible.

A deductible is the fixed-dollar amount that the subscriber must pay each year before the insurer begins to cover expenses. It is the maximum amount that the policyholder must pay out-of-pocket before the insurance company pays the rest of the bill. Deductibles help reduce moral hazard by requiring the insured party to bear some of the costs before collecting insurance benefits.