Reasons for Having a Minimum Participation Requirement Before a Group

question 33

Multiple Choice

Reasons for having a minimum participation requirement before a group is eligible for insurance include which of the following?
I.To lower the expense rate per unit of insurance
II.To minimize the possibility of insuring a group which consists largely of unhealthy individuals

• A)I only
• B)II only
• C)both I and II
• D)neither I nor II

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Definitions:

Unlimited Wants

The concept that human desires and aspirations are endless, which drives continual economic demand and consumption.

Scarce Resources

Natural or man-made assets that are limited in supply, making them valuable for the production of goods and services.

Unlimited Wants

Refers to the insatiable desire of consumers to possess goods and services that provide utility, exceeding the resources available to fulfill them.

Fresh Water

Fresh water is water with a low salt concentration, found in rivers, lakes, streams, and underground aquifers, essential for drinking, agriculture, and industry.