How does insurance reduce social burden?A.Insurance ensures that lenders publicize rates and treat all customers equally.B.Insurance ensures that losses are not passed on to society.C.Insurance ensures that people don't have to pay high deductibles.D.Insurance ensures that people are treated fairly in hiring and employment decisions.SUBMITarrow_backPREVIOUS
Question
How does insurance reduce social burden?A.Insurance ensures that lenders publicize rates and treat all customers equally.B.Insurance ensures that losses are not passed on to society.C.Insurance ensures that people don't have to pay high deductibles.D.Insurance ensures that people are treated fairly in hiring and employment decisions.SUBMITarrow_backPREVIOUS
Solution
Insurance reduces social burden primarily through the following ways:
B. Insurance ensures that losses are not passed on to society. When individuals or businesses suffer losses, insurance policies cover these losses so that the financial burden does not fall on society at large. This means that the cost of accidents, illnesses, and other unforeseen events are not borne by the public through increased taxes or reduced public services.
C. Insurance ensures that people don't have to pay high deductibles. By paying regular premiums, individuals are protected from having to pay large sums all at once in the event of a loss. This can prevent individuals from falling into debt or poverty due to an unexpected event.
The other options A and D are not typically
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The main function of health insurance is: Question 1 options: To make healthcare free To reduce total spending on healthcare To pool the risks of healthcare costs All of the above
Insurance Company X is considering issuing a new policy to cover services required by elderly people who suffer from diseases that afflict the elderly. Premiums for the policy must be low enough to attract customers. Therefore, Company X is concerned that the income from the policies would not be sufficient to pay for the claims that would be made.Which of the following strategies would be most likely to minimize Company X's losses on the policies?A) Attracting middle-aged customers unlikely to submit claims for benefits for many years.B) Insuring only those individuals who did not suffer any serious diseases as childrenC) Including a greater number of services in the policy than are included in other policies of lower costD) Insuring only those individuals who were rejected by other companies for similar policiesE) Insuring only those individuals who are wealthy enough to pay for the medical services
Health insurance would be most useful to a person who:A.owns property where a pedestrian is hurt.B.has to spend a week in a hospital.C.performs dangerous work as a surgeon.D.has a car stolen while on vacation.
Moral hazard is an important concern of insurance arrangements because the existence ofinsuranceA) provides increased incentives for risk taking.B) is a hindrance to efficient risk taking.C) causes the private cost of the insured activity to increase.D) creates an adverse selection problem but no moral hazard problem
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