Question

In: Economics

If you buy an insurance policy with a low deductible and no co-payments, you would end...

If you buy an insurance policy with a low deductible and no co-payments, you would end up paying​ a higher premium a lower premium the premium of a low risk individual

a. A higher premium

b. A lower premium

c. The premium of a low risk individual

d. Both B&C

Solutions

Expert Solution


Related Solutions

Suppose you have purchased Home Owners Insurance. This insurance policy has a $5,000 deductible, so that...
Suppose you have purchased Home Owners Insurance. This insurance policy has a $5,000 deductible, so that if you have a claim and the damage is less than $5,000 you pay for it out of pocket. However, if the damage is greater than $5,000, you pay the first $5,000 and the insurance pays the rest. In the current year, there is a probability of 0.085 that you will have a claim. If you have a claim for damages on your home,...
Explain why hedging is like buying an insurance policy. To buy an insurance policy, you need...
Explain why hedging is like buying an insurance policy. To buy an insurance policy, you need to pay a premium; what is the corresponding premium in hedging? Give an example to clarify your answer.
Given a $250 annual deductible, a $5,000 lid on the co-insurance, 80/20 co-insurance, and a $250,000...
Given a $250 annual deductible, a $5,000 lid on the co-insurance, 80/20 co-insurance, and a $250,000 policy limit, how much of a $27,500 medical bill will be paid by the insured? Question 11 options: 1) $ 250 2) $5,000 3) $5,450 4) $5,250 5) $5,700 Question 12 (0.5 points) Disability income policies usually have ____ that is a time delay from the date of the issuance of the policy until benefit privileges are activated. Question 12 options: 1) waiting periods...
You have a health plan with a $5,000 deductible, a 20% co-insurance and a $10,000 out...
You have a health plan with a $5,000 deductible, a 20% co-insurance and a $10,000 out of pocket maximum. You need surgery, which will require 3 days in the hospital. The hospital bill is $150,000 total. How much will you pay?
From the perspective of a policyholder, is a deductible in insurance policy acceptable? Why or why...
From the perspective of a policyholder, is a deductible in insurance policy acceptable? Why or why not?
Georgio has a health insurance policy that includes a deductible of $400 and a coinsurance of 20%.
Georgio has a health insurance policy that includes a deductible of $400 and a coinsurance of 20%. If her total is $6000, how much will her insurance pay?
Suzanne has no deductible on her health insurance policy she will tend to engage in a...
Suzanne has no deductible on her health insurance policy she will tend to engage in a lifestyle that is less healthy than a person with $1,200 insurance deductible this is said to be a problem of
An insurance policy has an ordinary deductible of 100 and a maximum covered loss of 10,000....
An insurance policy has an ordinary deductible of 100 and a maximum covered loss of 10,000. You observe the following six payments: 100 200 500 600 1000 5000 In addition, there are three payments at the limit. You fit a single parameter Pareto distribution with θ = 50 to the ground up distribution using maximum likelihood. Determine the estimated parameterα.
You own a house that cost $200000 to build. You buy a $15000 insurance policy to...
You own a house that cost $200000 to build. You buy a $15000 insurance policy to compensate you for damage to the house. The deductible $25000.(If your house suffers $4000 damage from a storm, you pay for all repairs yourself. If the house suffers $45000, in damage, you pay$25000 and the insurance company pays the remaining $20000.) Graph the positions of the unhedged home, the home insurance and the hedged home position on the profit and loss diagram. In the...
When you buy an HO policy, you should purchase enough insurance to pay for ______ of...
When you buy an HO policy, you should purchase enough insurance to pay for ______ of the cost of replacing your dwelling and your personal property. 100%. 80%. 50%. 120%.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT