n NISM Certifications
NSM General NISM
Medium

Why do insurers offer lower premiums when a policyholder chooses a higher deductible?

Practice question from IC 38 Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Because it reduces the insurer’s level of risk

    Correct answer

  2. B

    Because it increases the insurer’s level of risk

  3. C

    Because it increases the insured’s level of risk

  4. D

    Because it reduces the insured’s level of risk

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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