Question

What is the purpose of having an automatic basis to determine the level of coverage per employee in a group insurance scheme?

a.

To allow the employer to have discretion in determining benefits for each employee.

b.

To encourage less healthy employees to choose higher levels of coverage.

c.

To avoid anti-selection by ensuring that coverage is objectively determined.

d.

To provide flexibility for employees to negotiate their coverage levels.

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (c).To avoid anti-selection by ensuring that coverage is objectively determined. Explanation:The purpose of having an automatic basis to determine the level of coverage per employee in a group insurance scheme is to avoid anti-selection by ensuring that coverage is objectively determined. By establishing predetermined criteria, such as employee rank, salary, or years of employment, for determining coverage levels, the scheme can prevent less healthy employees from selecting higher levels of coverage to exploit the insurance benefits. This helps maintain fairness and equity within the insurance pool while minimizing the risk of adverse selection.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. What is the purpose of having an automatic basis to determine the level of coverage per employee in a group insurance scheme?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. Who is typically eligible for insurance cover in a group insurance scheme?

View solution

Q. What additional eligibility condition may apply for employees to qualify for insurance coverage?

View solution

Q. What is the purpose of a waiting period in a group insurance scheme?

View solution

Q. When does coverage typically cease in a group insurance scheme?

View solution

Q. How is disability handled in group insurance schemes in some developed countries?

View solution

Q. Which approach provides extended death benefit coverage for employees who become totally disabled prior to retirement age?

View solution

Q. What is typically required for continued waiver of premium in group insurance schemes?

View solution

Q. How does a new group term plan come into existence?

View solution

Q. Which of the following is NOT typically included in the general description of a group insurance product?

View solution

Q. Which of the following is a requirement specified in the Form IRDA-Life-Non Linked-NP for insurers to file a group term product to IRDA of India?

View solution

Q. What aspect of group insurance product design helps avoid anti-selection by individuals within a group?

View solution

Q. What information is typically required to be provided under the heading "Reinsurance" when filing a group term product with IRDA of India?

View solution

Q. Which of the following parameters is typically included in the financial projections section when filing a group term product with IRDA of India?

View solution

Q. Which of the following statements regarding the submission of policy terms and conditions to IRDA of India is accurate?

View solution

Q. What types of occupations are typically included in Class 1 of the occupation classification?

View solution

Q. Which occupation class may include skilled craftsmen and tradesmen whose duties involve only light manual work?

View solution

Q. Which occupation class may include auto and auto-related manufacturing, assembly, service and repair workers, along with farmers and long and short haul truck drivers?

View solution

Q. How is the pure risk premium calculated for a group?

View solution

Q. What does the gross premium include?

View solution

Q. How are expenses handled in the calculation of gross premium for group insurance?

View solution
View All MCQs on IC 92 Actuarial Aspects of Product Development

Recommended Subjects

Are you eager to expand your knowledge beyond IC 92 Actuarial Aspects of Product Development? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!

Cytogenetics

Delve into the genetic mysteries of chromosomes with our Cytogenetics category....

Life Sciences

Delve into the diverse world of life sciences with our specialized category. Explore...

General Knowledge

Expand your horizons and stay informed about the world with our General Knowledge...

Heat Transfer

Explore the fascinating world of heat transfer with our Heat Transfer category....

IC 89 Management Accounting

Boost your preparation for the IC 89 Management Accounting exam with our extensive...

Data Interpretation

Master the art of data analysis and interpretation with our Data Interpretation...

Optical Communication

Explore the world of high-speed data transmission with our Optical Communication...

Human Anatomy and Physiology

Embark on a journey through the human body with our Human Anatomy and Physiology...

Renewable Energy

Explore the sustainable future of energy with our Renewable Energy category. Dive...