You Overhear the Following in the Hallway, "Everyone Eventually Dies

question 141

Multiple Choice

You overhear the following in the hallway, "Everyone eventually dies, so how can a life insurance company make a profit? Isn't it a losing battle? You will always have to pay the death benefit to your clients!" You know that life insurance companies can be profitable. This is because

• A) the premiums you pay on a life insurance policy are always more than any death benefit, so the insurance company always comes out ahead.
• B) older people with a greater probability of dying during the term of a policy are denied any death benefits.
• C) the insurance company collects more than enough in premiums today to cover expected benefits payable today.
• D) life insurance companies are notorious for cheating clients with "fine print" policy clauses.

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Definitions:

Multiple Unions

The presence of more than one labor union within a single workplace or industry, each representing different groups of workers.

Right-to-Work Law

Legislation that prohibits agreements between labor unions and employers that make union membership or payment of union dues a condition of employment, either before or after hiring.

Union Representation

The act of acting on behalf of union members in negotiations with employers, usually regarding work conditions, wages, and other employment issues.

Initial Contract

The first agreement negotiated between a union and an employer outlining wages, hours, and working conditions for unionized employees.