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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 children
(C) Including a greater number of services in the
policy than are included in other policies of
lower cost
(D) Insuring only those individuals who were rejected
by other companies for similar policies
(E) Insuring only those individuals who are wealthy
enough to pay for the medical services |
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