5
QuizMultiple Choice

Insurance and Financial Protection — Quiz

Question 5 • Personal Finance

Why might a low premium plan result in higher total costs?

Answer
A
It eliminates coverage
B
It reduces financial risk
C
It removes deductibles
D
It increases out-of-pocket expenses

Explanation

A low premium means you pay less regularly to keep the plan, but the plan may require you to pay more when you receive care. Higher deductibles, copayments, or coinsurance can increase your out-of-pocket expenses, making your total costs higher despite the lower premium. The correct choice is D, “It increases out-of-pocket expenses.”

AI-written and checked against the verified answer.

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