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08 Nov 2014, 06:36
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Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
65%
(hard)
Question Stats:
55% (01:49) correct
45%
(01:51)
wrong
based on 986
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Not Attempted Yet
An insurance company has decided to offer “college insurance.” This is a plan that guarantees that a child who is the subject of the insurance will be provided with $30,000 a year for four years of college education upon turning eighteen. Such plans are great for attracting new business to the company, but the insurance company executives worry that the company will lose money, as the premiums may not be enough to pay for the education claims.
Which of the following plans will best help to prevent the insurance company from losing money on the college insurance policies?
A) Requiring that the policies be purchased only for children under the age of two.
B) Insuring children whose families are able to pay for college on their own.
C) Offering an optional five thousand dollar benefit to be used for educational travel abroad.
D) Insuring only one child per family.
E) Offering premium discounts for multiple-policy holders.
Source : Grockit
Which of the following plans will best help to prevent the insurance company from losing money on the college insurance policies?
A) Requiring that the policies be purchased only for children under the age of two.
B) Insuring children whose families are able to pay for college on their own.
C) Offering an optional five thousand dollar benefit to be used for educational travel abroad.
D) Insuring only one child per family.
E) Offering premium discounts for multiple-policy holders.
Source : Grockit
08 Nov 2014, 06:52
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How can company increase the premium.
A) Requiring that the policies be purchased only for children under the age of two. -> This increases the tenure of the policy and that increases the premiums
B) Insuring children whose families are able to pay for college on their own. -> Still they might loose money as the parent might buy policy at 17th birthday of the child and company has to pay next year.
C) Offering an optional five thousand dollar benefit to be used for educational travel abroad. -> Increases the cost of the premium
D) Insuring only one child per family. -> Same issue as option B
E) Offering premium discounts for multiple-policy holders. -> They will loose premiums and eventually money in the policy
A) Requiring that the policies be purchased only for children under the age of two. -> This increases the tenure of the policy and that increases the premiums
B) Insuring children whose families are able to pay for college on their own. -> Still they might loose money as the parent might buy policy at 17th birthday of the child and company has to pay next year.
C) Offering an optional five thousand dollar benefit to be used for educational travel abroad. -> Increases the cost of the premium
D) Insuring only one child per family. -> Same issue as option B
E) Offering premium discounts for multiple-policy holders. -> They will loose premiums and eventually money in the policy
30 Jun 2017, 03:44
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kinjiGC
If the tenor of the policy increased, the size of the premiums may also be decreased.
