Question

What purpose does the requirement of a large proportion of eligible persons joining the scheme serve?

a.

To increase adverse selection against the insurance company

b.

To ensure a high proportion of impaired lives in the group

c.

To prevent the insurance company from providing coverage

d.

To mitigate adverse selection and prevent a high proportion of impaired lives

Answer: (d).To mitigate adverse selection and prevent a high proportion of impaired lives Explanation:A large proportion of eligible persons joining the scheme ensures that no adverse selection is exercised against the insurance company and prevents a high proportion of impaired lives in the group.

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Q. What purpose does the requirement of a large proportion of eligible persons joining the scheme serve?

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