Chapter 5, Problem 4AA

To determine

The word that fits best as the answer to the question.

Answer to Problem 4AA

Option (h) − Status.

Explanation of Solution

As  insurance companies are there to provide protection against the financial risk, they decide the rate of the insurance premium and all the charges involved as per the marital status because history tells that those who are married are less risky and are cheaper because they drive safely.

So insurance companies check the driver’s marital status because married people are safe drivers.

No other option fits in as the answer to the question because talking about the condition of being married, ‘status’ is the only option linked with the question and no other option does.

Economics Concept Introduction

Introduction:

Insurance companies are formed to provide protection from the risk to the people from financial loss. They protect the people against loss in return for premium payments on a regular basis.