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Insurance Company X is considering issuing a new policy to [#permalink]
15 Aug 2006, 17:49
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4. 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 Xâ€™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 for me. We are looking for a way for the insurance companies to increase their profit per customer. If they can do that they can go from an income that is insufficient to one that results in a profit. We need to find a way for them to do this.
A clearly provides this. Any customers who are is not likely to submit a claim for a long time is good for the net income, and helps the company to offset its expenses on the elderly.
I understant that 'A' is the only one that makes some sense but how do we know middle-aged customers suffer from diseases that affect elderly? This policy is designed for elderly who suffer from diseases that affect elderly.
I have the same question as mbawaters. The policy in question is for elderly. What has it to do with middle-aged customers.
I marked C coz
If there are services that are offered in low cost policies, they are obviously inexpensive. If these are included in the policy for elders, X can offer more services at low cost which would attract a lot of customers.
Re: Insurance Company X is considering issuing a new policy to [#permalink]
18 Jan 2014, 19:08
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Re: Insurance Company X is considering issuing a new policy to
18 Jan 2014, 19:08