Question

All of the following are advantages of purchasing a package policy instead of purchasing several separate policies Except

1- the insured can deal with only one insurer.

2- the premium is lower than if separate policies had been purchased.

3- underwriting is more liberal.

4- coverage is more complete and has fewer gaps.

Answer 1

Answer-3.underwriting is more liberal.

Underwriting is a term used by life insurers to describe the process of assessing risk, ensuring that the cost of the cover is proportionate to the risks faced by the individual concerned. People with the same or similar risk pay the same or similar premium rates.

The process of underwriting taken place when you submit your application. To assess a person’s risk, life insurers rely on information from a range of sources. If you are applying for a policy that is underwritten, as a minimum you will be asked to complete an application form and a medical questionnaire.

A single insurance policy that combines several coverages previously sold separately. Examples include homeowners insurance and commercial multiple peril insurance.

Insurance companies protect individuals and organizations from financial loss by assuming billions of dollars in risk each year—risks of car accident, property damage, illness, and other occurrences. Underwriters decide whether insurance is provided and, if so, under what terms. They identify and calculate the risk of loss from policyholders, establish who receives a policy, determine the appropriate premium, and write policies that cover this risk. An insurance company may lose business to competitors if risk underwriting is too conservative, or it may have to pay excessive claims if the underwriting actions are too liberal.

All other three option are advantage of Package insurance.

since you get

High Degree of Coverage

A package policy can cover you against all sorts of risks under its protective umbrella. For instance, a single policy can insure you against property risks, asset risks, loss of income, equipment breakdown, theft, crime, general liability cover, etc. Choose from different available packages based on your needs.

Low-Cost Insurance

Most insurance companies will offer you good discounts since you’re opting for a bundle of insurance covers from them. In that respect, going in for a package policy will be cheaper than paying for individual policies.

And also Time saver by less dealing with more insurer.