Question

question 4 / 10
which of the following statements about health insurance is false?
a. people use insurance to reduce their risk of having very large medical expenses.
b. insurance plans with different premiums and deductibles let you decide how much financial loss you are willing to risk.
c. paying for health insurance is always cheaper than paying for your own medical expenses.
d. none of the above.

Explanation:

• Option A: Insurance (including health insurance) is a risk - management tool. People use it to reduce the financial risk of incurring very large medical expenses (e.g., from a serious illness or accident). So this statement is true.
• Option B: Different health insurance plans have different premiums (the amount you pay for the insurance) and deductibles (the amount you pay out - of - pocket before insurance starts covering costs). By choosing a plan, you are essentially deciding how much financial loss you are willing to risk (through the deductible) and how much you pay regularly (premium). So this statement is true.
• Option C: Paying for health insurance is not always cheaper than paying for your own medical expenses. For example, if you are very healthy and have few medical needs, the total cost of paying for insurance premiums over time might be more than the cost of paying for the few medical expenses you have out - of - pocket. Also, in cases of serious medical issues, insurance can save you a large amount of money compared to paying out - of - pocket. So this statement is false.
• Option D: Since option C is false, this option is incorrect.

Answer:

C. Paying for health insurance is always cheaper than paying for your own medical expenses.