Decide whether the statement makes sense. Explain your reasoning.Insurance policy A costs $250 and has no deductible. Insurance policy B costs $275 and has a $500 yearly deductible. Candace thinks the extra $25 per month is worth it to get the $500 deductible, so she buys policy B.

Question

What will be an ideal response?

Answer 1

Does not make sense. Candace is paying an additional $25 per month ($300 per year) to get a $500 deductible. However the deductible (what you pay out of pocket before the insurance kicks in) is a cost, not a benefit! All other things being equal, policy A is clearly the better deal. (Explanations will vary.)