In: Economics
Do you think it is possible for a person to benefit from having health insurance coverage if the premiums paid exceed the cost of the medical care received? If yes/no, please explain why.
Discuss whether it is possible for an insurance company to benefit if the medical care it provides costs more than the premiums paid in by the consumers of medical insurance.
Yes, it is possible for a person to benefit from having health insurance coverage if the premiums paid exceed the cost of the medical care received. At the time of claim the cost for the medial care received would be huge, that may not be possible for a common to pay such an amount at one time. But when that person already have a health insurance he have to pay small amount at a time by installments. This reduces a huge burden on that person.
There would be multiple opinions for the question. If a company is willing to give insurance amount more than the premium paid, the costumers will increase due to the policy. Not all the people claim the insurance, some may lapse. So, these lapsed insurance amount will be the profit for the company. If any of the insurance claim get lapse, then company will be in loss and will be tending to shutting down. Better option from the view point of a insurance company would be at the starting they can give insurance more than the premium paid. After the company got well established they can remove the policy and come back to normal rates. This increase the customers and profit too.