Succeeding in the World of Work

Section 1: Insurance Basics

After You Read Section Review Answers

Review Key Concepts

1. A premium is the amount of money paid for insurance; a deductible is the amount paid out of pocket by the policyholder before the insurance company pays a claim.
2. A sample answer might be to know what kind of insurance you want; to contact different insurance agencies and learn about coverage, costs, and deductibles; and to buy the right amount of coverage, with a higher deductible to lower premium costs.
3. A sample answer might be that insurance companies charge higher premiums to people they think are more likely to file a claim, so you can lower your costs by being a safe driver, not smoking, and being in overall good health.

4. Manuel will pay $910 each year (100% - 10% = 90%; $550 x 90% = $495 x 2 = $990; $990 - $80 = $910).