Deductibles vs. Premiums: A Simple Guide to Insurance Costs
When shopping for insurance, you'll constantly encounter the terms "deductible" and "premium." They have an inverse relationship that affects your overall cost.
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What is a Premium?
A premium is the fixed amount you pay regularly (usually monthly or annually) to keep your insurance policy active. It's the cost of having coverage.
What is a Deductible?
A deductible is the amount of money you have to pay out-of-pocket for a covered claim before your insurance company starts to pay. Generally, a higher deductible means a lower premium, and vice versa.
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