Question

What is a potential advantage of voluntary plans in employer-employee group insurance schemes?

a.

They reduce the insurer's risk of anti-selection.

b.

They eliminate the need for evidence of insurability for coverage above the FCL.

c.

They help in discharging the cost of insurance, potentially providing coverage better suited to employees’ needs.

d.

They simplify the administrative process compared to compulsory plans.

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (c).They help in discharging the cost of insurance, potentially providing coverage better suited to employees’ needs. Explanation:A potential advantage of voluntary plans in employer-employee group insurance schemes is that they help in discharging the cost of insurance. This cost-sharing approach can make it feasible to provide coverage options that are better suited to the diverse needs of employees, including the possibility of offering higher sums assured to higher salaried personnel. While voluntary plans are more complicated to administer due to the need for employee consent and meeting minimum participation limits, they offer the benefit of customizable coverage that can align more closely with individual employee needs and circumstances.

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Q. What is a potential advantage of voluntary plans in employer-employee group insurance schemes?
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