Question

Jillian wishes to purchase an all-inclusive insurance policy for her new car. If an insurance company quotes her a price of $100 per month, she should

never purchase the plan regardless of cost-benefit analysis
only purchase the plan it her derived benefit is greater than $100
only purchase the plan if her derived benefit is less than $100
purchase the plan even when the benefit to her is less than $100​

Answer 1

Answer: only purchase the plan it her derived benefit is greater than $100

Explanation: An insurance policy may be explained as a binding contract between an individual and an insurance company usually aimed at providing financial cover on a certain property in the situation of damage or loss of that item. In the scenario above, the item to be insured is a car and the quoted insurance fee is $100 monthly. Before making a decision, it is essential that Jillian pefrms a cost-benefit analysis in other to determine if the benefit of the insurance outweighs the cost. And only then should she make a purchase.