Final answer:
It is true that declining deductibles allow customers to reduce their out-of-pocket expenses during a claim by accumulating a deductible balance.
Step-by-step explanation:
True or false? It is true that with declining deductibles, customers earn a deductible "balance" that can reduce the out-of-pocket deductible expense when a claim occurs. Cost-sharing mechanisms like deductibles, copayments, and coinsurance are integral parts of many insurance policies. These are designed to reduce moral hazard by making policyholders bear a portion of the costs. A deductible is the amount a policyholder must pay before insurance kicks in. Some plans may offer a declining deductible feature, where the deductible decreases as policyholders earn credits for not filing claims, thus reducing their out-of-pocket expenses when they do need to file a claim.