The premium on insurance is often _____ to the deductible,allowing insurance companies to _____ their customers.

A) equal;pool
B) directly related;signal
C) equal;offer a fair premium to
D) inversely related;screen

Deductible

A sum specified in an insurance policy that the insured individual must pay before being compensated for a claim; deductibles reduce moral hazard.

Premium

The amount paid for an insurance policy, or the difference between the higher price paid for a fixed-income security above its face value.

Insurance Companies

Organizations that provide risk management by compensating for financial losses in exchange for premium payments.