Question

which statement best defines the term deductible?
it is money a consumer receives after experiencing a loss.
it is the amount a consumer pays before the insurance will start paying.
it is money paid by a consumer to share the pool cost of a payout.
it is a fee paid to an insurance company to purchase coverage.

Explanation:

To determine the correct definition of "deductible", we analyze each option:

• The first option describes a claim payout, not a deductible.
• The second option: A deductible is the amount a policyholder (consumer) must pay out - of - pocket before the insurance company begins to pay for covered losses. This matches the definition of a deductible.
• The third option describes a co - payment or co - insurance (sharing the cost of a payout), not a deductible.
• The fourth option describes a premium (the fee to purchase insurance coverage), not a deductible.

Answer:

B. It is the amount a consumer pays before the insurance will start paying.