Critical Reasoning

Insurance policies guaranteeing the policyholder's income if he or she becomes permanently disabled will surely provide the insurance industry with a popular and profitable product. When compared to the potential lost income, the cost to a worker who is at average risk of disabling injury is very little, often no more than a few dollars a month, and is far outweighed by the benefits paid to the disabled.
Which of the following, if true, most seriously undermines the prediction made above?

A)The large majority of workers significantly underestimate the likelihood of suffering a disabling injury.

B)Workers at greater than average risk are likely to be charged higher premiums on disability insurance.

C)Disability insurance that guarantees the policyholder's income will be more expensive for those with large incomes.

D)Some employers already provide disability insurance that guarantees their employees' incomes.

E)Insurance companies will lose money on any disability insurance policy they sell to a worker who later becomes permanently disabled.

OA: A

Have a doubt , will raise it after a few replies!

sohrabkalra wrote:Insurance policies guaranteeing the policyholder's income if he or she becomes permanently disabled will surely provide the insurance industry with a popular and profitable product. When compared to the potential lost income, the cost to a worker who is at average risk of disabling injury is very little, often no more than a few dollars a month, and is far outweighed by the benefits paid to the disabled.
Which of the following, if true, most seriously undermines the prediction made above?

A)The large majority of workers significantly underestimate the likelihood of suffering a disabling injury.

B)Workers at greater than average risk are likely to be charged higher premiums on disability insurance.

C)Disability insurance that guarantees the policyholder's income will be more expensive for those with large incomes.

D)Some employers already provide disability insurance that guarantees their employees' incomes.

E)Insurance companies will lose money on any disability insurance policy they sell to a worker who later becomes permanently disabled.

OA: A

Have a doubt , will raise it after a few replies!

I went with A. The first thing to do is to determine what is "the prediction above" that we're trying to undermine.

The prediction is that a particular insurance product will be popular and profitable.

Answer A undermines the assumption of general popularity.

The other choice worth considering, IMO, was E. E undermines the assumption of profitability, but only to a limited extent.

We can not conclude anything about overall profitability based on the information in E about individual claims. A is the better choice because it calls into question overall popularity.

Yes, between choices (A) & (E) , A is definitely winner.

choice (E) "Insurance companies will lose money on any disability insurance policy they sell to a worker who later becomes permanently disabled."

This choice (E) is already assumed in the argument by the following statement:

"When compared to the potential lost income, the cost to a worker who is at average risk of disabling injury is very little,"

E would make impact if its changed to "Majority" => to attack the "average" argument. Which is nothing but close to choice (A).

What about D ? That also can restrict the popularity of the insurance scheme !

I agree that A is more strong in this case, but my doubt why is D not a contender
A) because it has the quantity word SOME, which is less strong than MOST in A
or
B) some other reason

In general, if the stimulus has a reasoning that A MUST CAUSE B then is it advisable to leave an answer choice that weakens the cause effect relation but in SOME CASES in favour of the one that does in MOST Cases?

Insurance policies guaranteeing the policyholder's income if he or she becomes permanently disabled will surely provide the insurance industry with a popular and profitable product. When compared to the potential lost income, the cost to a worker who is at average risk of disabling injury is very little, often no more than a few dollars a month, and is far outweighed by the benefits paid to the disabled.

Argument:
cost to avg risk employee is very little ===> disability insurance business is profitable;

consider choice (D):

D)Some employers already provide disability insurance that guarantees their employees' incomes.
===> so good for the insurance companies--> they are already milking the cow;
This is not even a contender because this is a subset of people,no idea which insurance company is providing insurance etc...

If the question stem has changed to something like "a newly started insurance company makes profits" --> 'D' becomes the contender because many people are already insured.. and are unlikely to change...

very good question. I was totally confused.

The main point or conclusion of the argument is "the insurance industry with a popular and profitable product" and hence anything that mars profit or popularity is a contender. so, A, D and E are contenders. A & D mars popularity and E mars profitability. But E says what a insurance company does. so, out. D is telling for only "some". Hence A remains.

Interesting, I overlooked "profit";
'D' is a trap for those who go by keywords;

D) Some employers already provide disability insurance that guarantees their employees' incomes.
====> What can be inferred? may be popular or profitable --> could be.If at all strengthens not weakens.