Question

In: Finance

1.Over the course of several years, property and casualty insurance (e.g. homeowner's insurance, auto insurance) expects...

1.Over the course of several years, property and casualty insurance (e.g. homeowner's insurance, auto insurance) expects to encounter _________ claims from a customer, and health insurance expects to encounter ___________ claims from a customer.

a.frequent; frequent

b.frequent; infrequent

c.infrequent; frequent

d.infrequent; infrequent

e.ulcer-oriented; more ulcer-oriented

2. In a Term Life Insurance policy, as an individual continues with the policy over a number of years with a fixed level of coverage

a.the annual premiums will generally increase over time.

b.the annual premiums will generally decrease over time.

c.the annual premiums will generally stay the same over time.

d.the household's equity or wealth due to the policy will increase over time.

e.the household's equity or wealth due to the policy will decrease over time.

Solutions

Expert Solution

1) c.infrequent; frequent

Insurance company normally expects that an individual's house will not get destroyed or damage frequently as it is majorly due to fire or any unforeseen event such as earthquake which will not occur frequently. While it is expected that an individual will get sick now and then hence they expects more frequent for health insurance

2) a.the annual premiums will generally increase over time.

As an individual grows old, risk associated with him increases so thus the annual premiums


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