CR from 10th OG

[croman]

Explanation please,wrong for me:(

Insurance Company X is considering issuing a new policy to cover services required by elderly people who suffer from diseases that afflict the elderly. Premiums for the policy must be low enough to attract customers.Therefore, Company X is concerned that the income from the policies would not be sufficient to pay for the claims that would be made.

Which of the following strategies would be most likely to minimize Company X’s losses on the policies?
A. Attracting middle-aged customers unlikely to submit claims for benefits for many years.
B. Insuring only those individuals who did not suffer any serious diseases as children
C. Including a greater number of services in the policy than are included in other policies of lower cost
D. Insuring only those individuals who were rejected by other companies for similar policies
E. Insuring only those individuals who are wealthy enough to pay for the medical services

[croman]

OG answer is A

[envyramana]

A. Attracting middle-aged customers unlikely to submit claims for benefits for many years.
Is right since if this happens insurance company reduces its losses

B. Insuring only those individuals who did not suffer any serious diseases as children
Thios doesnt ensure that who were not ill since childhood may not become ill now

C. Including a greater number of services in the policy than are included in other policies of lower cost
This increases the risk of losses

D. Insuring only those individuals who were rejected by other companies for similar policies
This increases the risk of losses as the other companies might have rejected as they might have conducted medical tests

E. Insuring only those individuals who are wealthy enough to pay for the medical services
wealthy people r never the only customers

Ramana

[khanshainur]

The answer seems to be A