If Insurance Companies Are Required to Offer Coverage to All

question 11

Multiple Choice

If insurance companies are required to offer coverage to all interested people, it is said that premiums for each person will be increased. Assume that the insurance market is perfectly competitive. What is the major reason for raising the premium?

• A) The insurance companies take advantage of the increased demand and collude.
• B) Medical services are more expensive because of increased demand.
• C) Less healthy people join the pool of insured and hence increase the risk and the premium.
• D) None of the statements is correct.

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Definitions:

Inorganic Mineral Particles

Solid, naturally occurring substances that are not derived from living organisms, commonly found in soils and rocks, essential for various environmental and biological processes.

Organic Material

Matter that comes from living organisms or is composed of compounds originally synthesized by living organisms, often rich in carbon.

Micronutrient

An essential element that is required in trace amounts for normal growth. Compare with macronutrient.

Chlorine

A chemical element with symbol Cl and atomic number 17, known for its roles in disinfection, bleaching, and in the manufacture of a wide range of products.