Tanchat wrote:
Dear experts :
GMATNinja AndrewNWhy is (B) wrong?
We are talking about elderly people, but (A) does change the target group from elderly people to middle-aged people. (In Business World, it may not be weird, but is it acceptable in GMAT?)
I know that (B) may require an assumption that someone who didn't suffer any serious when they are a child may unlikely to claim for benefits. However, (A) does as well. Why middle-aged customers would be interested in an insurance package covering services required by elderly people?
Hello,
Tanchat. If someone purchases an insurance policy, then that person receives the coverage of that policy. I think you may be misinterpreting
a new policy to cover services required by elderly people to mean that only elderly people are covered by that policy. Answer choice (A) introduces another group for whom the policy might not be
required (because these people may be in relatively good health), but for whom it may provide peace of mind—i.e. just in case the person develops a disease that more typically afflicts the elderly, or may develop such a disease within a couple years. This is, incidentally, just how health insurance works in real life, with younger people, those less likely to need medical treatment, paying lower premiums for coverage than their higher-risk elderly counterparts.
Answer choice (B) focuses on
diseases, but the wrong kinds. Those that afflict children are not the same as those that afflict the elderly, so that part is irrelevant to the matter at hand unless some correlation could be established between the two. Furthermore,
only is extreme. By restricting the pool of applicants, the insurance company would be acting against its own interests
to attract customers. Answer choice (A) fills the logical gap that the question stem calls for: the company will stand to attract more people who will not need to submit claims
for many years, thereby raising money right now
to minimize... losses on the [new low-premium] policies.
Perhaps the two answer choices make more sense now. Thank you for thinking to ask.
- Andrew
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