What is the primary risk associated with the Large Deductible Plan?

The primary risk associated with a Large Deductible Plan is that the insured assumes substantial portions of claims. In this type of insurance arrangement, the insured must pay a significant amount out-of-pocket (the deductible) before the insurance coverage kicks in. While this arrangement can lead to lower insurance premiums, it also means that the insured bears more financial risk, especially for higher-frequency claims or losses that fall below the deductible threshold.

By setting a large deductible, the insured takes on more responsibility for claims costs, which requires careful financial planning. If numerous claims occur, or if the claims are substantial in nature, the insured could face significant out-of-pocket expenses, potentially leading to financial strain. This risk is central to the large deductible model, emphasizing the importance of evaluating one's risk tolerance and cash flow when considering such insurance arrangements.

The other options do not encapsulate the essential element of financial risk inherent in large deductible plans, which revolves around the insured's assumption of claims costs.