Insurance companies agree to pay medical costs to customers who pay into their health insurance program. One such insurance company offers health insurance to customers aged over 50, without any medical examination, it their family also buys the company's health insurance. Although the cost to the company of offering this insurance to customers above 60 is potentially high, the company still feels confident it will make a profit from this health insurance program. Which of the following assumptions is the company basing its expectations for good results on? The insurance payments made by young customers, who are less likely to make insurance claims, outweighs the costs of medical treatments that have to be paid to customers aged over 60 Families with more older members have a slightly higher average age than families with fewer older members. O Younger customers are likely to submit medical claims which are substantially lower than medical claims submitted by customers over 60 Many insurance companies have followed this company's example and have started offering similar insurance programs
Insurance companies agree to pay medical costs to customers who pay into their health insurance program. One such insurance company offers health insurance to customers aged over 50, without any medical examination, it their family also buys the company's health insurance. Although the cost to the company of offering this insurance to customers above 60 is potentially high, the company still feels confident it will make a profit from this health insurance program. Which of the following assumptions is the company basing its expectations for good results on? The insurance payments made by young customers, who are less likely to make insurance claims, outweighs the costs of medical treatments that have to be paid to customers aged over 60 Families with more older members have a slightly higher average age than families with fewer older members. O Younger customers are likely to submit medical claims which are substantially lower than medical claims submitted by customers over 60 Many insurance companies have followed this company's example and have started offering similar insurance programs
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter5: Probability: An Introduction To Modeling Uncertainty
Section: Chapter Questions
Problem 17P: The probability distribution for damage claims paid by the Newton Automobile Insurance Company on...
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