Question

Horatio has to pay $50 out of each paycheck to his insurance company. He had a medical procedure that he had to pay out $1000 for. The next time he had the procedure, his insurance company covered its entire cost.
Which best describes what he was paying for?
- The $50/month is the deductible, and the $1000 was his premium.
-The $50/month is the premium, and the $1000 was his deductible.
-Both payments covered his deductible.
-Both payments covered his premiums.

Answer 1

The second option, The $50/month is the premium and the $1000 was his deductible.

A premium is basically a monthly bill to keep your insurance. A deductible is the fixed amount of medical costs you are responsible for paying before your insurance coverage starts to pick up the bills.