Which of the Following Is Not an Advantage to an Insurance

question 109

Multiple Choice

Which of the following is not an advantage to an insurance company insuring a large group of people for health insurance?

• A)The characteristics of a large group are likely to reflect those of the entire population.
• B)It is easier to accurately predict the number of claims for a group than for an individual.
• C)When all group members pay the premium, the problem of moral hazard is reduced.
• D)When all group members pay the premium, the problem of adverse selection is reduced.

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Definitions:

Wisconsin

A U.S. state located in the north-central, Midwest, and Great Lakes regions, known for its dairy production and natural resources.

Triangle Waist Company

A clothing manufacturer in New York City whose factory burned down in 1911, leading to significant reforms in labor laws.

Consequences

Outcomes or effects that result from a previous action or decision, either positive or negative in nature.

Upton Sinclair

An American writer and social activist, famous for his novel "The Jungle" which exposed the harsh conditions of the U.S. meatpacking industry, leading to significant food safety reforms.