Which of the Following Is Not an Advantage to an Insurance

question 159

Multiple Choice

Which of the following is not an advantage to an insurance company of 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.

Comprehend the importance of the moral atmosphere and hidden curriculum in schools.

Recognize the value of service learning in promoting moral and social responsibility.

Understand the significance and impact of service learning on student outcomes.

Grasp the concept of conduct problems and their social implications.

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Definitions:

Hidden Information

Information that is not known to one party in a transaction, which can lead to an imbalance of power or adverse selection.

Moral Hazard

A situation where one party is more likely to take risks because another party bears the consequences of those risks, often arising in insurance and finance contexts.

Government Bailouts

Financial support provided by the government to prevent the failure of a struggling company or industry, often to stabilize the economy and preserve jobs.

Struggling Companies

Firms that are facing financial difficulties or are unable to achieve desired business performance.