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Insurance Company X is considering issuing a new policy to

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Insurance Company X is considering issuing a new policy to [#permalink] New post 17 Jun 2006, 10:37
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A
B
C
D
E

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Insurance Company X is considering issuing a new policy to cover services required by elderly people who suffer from diseases that afflict the elderly. Premiums for the policy must be low enough to attract customers. Therefore, Company X is concerned that the income from the policies would not be sufficient to pay for the claims that would be made.
Which of the following strategies would be most likely to minimize Company X’s losses on the policies?
(A) Attracting middle-aged customers unlikely to submit claims for benefits for many years
(B) Insuring only those individuals who did not suffer any serious diseases as children
(C) Including a greater number of services in the policy than are included in other policies of lower cost
(D) Insuring only those individuals who were rejected by other companies for similar policies
(E) Insuring only those individuals who are wealthy enough to pay for the medical services
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 [#permalink] New post 17 Jun 2006, 10:46
C..
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Re: CR-Insurance company [#permalink] New post 18 Jun 2006, 10:12
jaynayak wrote:
Insurance Company X is considering issuing a new policy to cover services required by elderly people who suffer from diseases that afflict the elderly. Premiums for the policy must be low enough to attract customers. Therefore, Company X is concerned that the income from the policies would not be sufficient to pay for the claims that would be made.
Which of the following strategies would be most likely to minimize Company X’s losses on the policies?
(A) Attracting middle-aged customers unlikely to submit claims for benefits for many years
(B) Insuring only those individuals who did not suffer any serious diseases as children
(C) Including a greater number of services in the policy than are included in other policies of lower cost
(D) Insuring only those individuals who were rejected by other companies for similar policies
(E) Insuring only those individuals who are wealthy enough to pay for the medical services


A: does not claim for many yrs -> yes, but middle-aged irrelevant? maybe
B: does not mean these ppl will not contract the disease and claim
C: will result in even more costs for company X
D: increases the risks of company X if they take in these ppl, more claims?
E: not a guarantee that these ppl will not claim

So, best answer is A.
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 [#permalink] New post 24 Jun 2006, 09:13
OA: A
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 [#permalink] New post 24 Jun 2006, 09:16
jaynayak wrote:
OA: A

what is the source. this one... whacked me
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 [#permalink] New post 24 Jun 2006, 10:23
straight A

alternate customer who do not have claims in the near future
  [#permalink] 24 Jun 2006, 10:23
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