Question

g you want to insure as many people as possible, but you cannot charge less for insurance than you expect to pay out. if you do, you will go bankrupt, and you will not be able to pay the medical bills of some people who get sick. (iii) people know whether they are healthy or unhealthy, but it is either impossible or illegal for you to know whether a person is healthy or unhealthy. this means that you cannot charge less to healthy people and more to sick people since you do not know which individuals fall into each group. (iv) there are an equal number of healthy and unhealthy people. how much will you charge for insurance in equilibrium, and who will buy insurance?

Answer 1

Insurance: It is a contract or policy in which an insurer indemnifies another against losses from specific contingencies or perils.

There are different types of insurance policies. Life, home, health, and auto are the most common forms of insurance.

The main components that make up most insurance policies are the deductible, policy limit, and premium.

A multitude of several types of insurance policies is available, and virtually any individual.

The very common types of personal insurance policies are auto, health, homeowners, and life. Most individuals in the US. people have at least one of these types of insurance, and car insurance is required by law.

Depending on the different type of life insurance policy and how it is used, permanent life insurance can be considered a financial asset because of its capacity to build cash value or be converted into cash.

normally put, most permanent life insurance policies can build cash value over time.

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