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Which question can best help a consumer assess risk when purchasing insurance?
How much must be paid to make a claim?
O What problems are most likely to happen?
What are the possible payouts on a claim?
How much are the monthly premiums?



Answer :

Final answer:

Insurance premiums are payments for coverage, actuarially fair policies relate premiums to risk, moral hazard can increase insurance costs.


Explanation:

Insurance premiums are the amount of money consumers pay to the insurance company for coverage. These payments help cover the risk of potential losses. Actuarially fair insurance policies are designed so that the premiums paid are proportional to the level of risk. Moral hazard is the tendency of insured individuals to take higher risks due to being protected, potentially leading to more costly insurance premiums.


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