Larry Has a Health Insurance Policy That Includes a Deductible

question 84

Multiple Choice

Larry has a health insurance policy that includes a deductible of $1,000 and a coinsurance of 20%. If his total bill is $7,000, how much will his insurance pay?

• A) $800
• B) $1,000
• C) $2,200
• D) $4,800
• E) $6,000

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Definitions:

Utility Theory

A theory in economics and finance that describes how individuals choose among different options or actions based on their expected happiness or satisfaction.

Framing

The way a decision is phrased or the way options are described. Seemingly peripheral aspects of the framing can influence decisions by changing the point of reference.

Double-Or-Nothing

A gamble or bet in which the stakes are either doubled or lost entirely.

Coin Flip

A basic probability event with two possible outcomes, heads or tails, often used to illustrate randomness or make simple decisions.