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Insurance policies guaranteeing the policyholder's income if he or she

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Manager
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Joined: 31 Aug 2016
Posts: 174
Location: India
Concentration: Operations, Finance
GMAT 1: 680 Q49 V33
GMAT 2: 700 Q49 V37
GPA: 2.81
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Insurance policies guaranteeing the policyholder's income if he or she  [#permalink]

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New post 01 Nov 2018, 17:16
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Difficulty:

  75% (hard)

Question Stats:

52% (02:02) correct 48% (02:00) wrong based on 98 sessions

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Insurance policies guaranteeing the policyholder's income if he or she becomes permanently disabled will surely provide the insurance industry with a popular and profitable product. When compared to the potential lost income, the cost to a worker who is at average risk of disabling injury is very little, often no more than a few dollars a month, and is far outweighed by the benefits paid to the disabled.

Which of the following, if true, most seriously undermines the prediction made above?
A. The large majority of workers significantly underestimate the likelihood of suffering a disabling injury.
B. Workers at greater than average risk are likely to be charged higher premiums on disability insurance.
C. Disability insurance that guarantees the policyholder's income will be more expensive for those with large incomes.
D. Some employers already provide disability insurance that guarantees their employees' incomes.
E. Insurance companies will lose money on any disability insurance policy they sell to a worker who later becomes permanently disabled.

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Re: Insurance policies guaranteeing the policyholder's income if he or she  [#permalink]

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New post 01 Nov 2018, 18:24
A. The large majority of workers significantly underestimate the likelihood of suffering a disabling injury.

this says that most people don't think that they will get disabled ..no point of wasting money buying the insurance

IMO A
GMAT Club Bot
Re: Insurance policies guaranteeing the policyholder's income if he or she &nbs [#permalink] 01 Nov 2018, 18:24
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Insurance policies guaranteeing the policyholder's income if he or she

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