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:

Classical Probability

Classical probability is a theoretical probability calculation based on the assumption that all outcomes are equally likely and there are a finite number of outcomes.

Choosing

The process of making a selection from a range of options or possibilities.

Week

A time unit consisting of seven days.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1 where 0 indicates impossibility and 1 indicates certainty.