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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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 60, 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. Familles with more older members have a slightly higher average age than familles with fewer older members. 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
Transcribed Image Text: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 60, 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. Familles with more older members have a slightly higher average age than familles with fewer older members. 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
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