If "deduct" means to take away from a total amount, what does the word "deductible" mean?

A. to be taken away first
B. to be taken away quickly
C. one who takes away
D. able to be taken away



Answer :

Final answer:

A deductible is an amount that policyholders must pay before insurance coverage begins, aimed at reducing moral hazard.


Explanation:

Deductible in insurance refers to the amount that policyholders must pay out-of-pocket before the coverage kicks in.

For example, if someone has a [tex]$500 deductible on their health insurance, they must pay $[/tex]500 before the insurance starts covering medical expenses.

This concept is designed to reduce moral hazard by making the insured party responsible for a portion of the costs.


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