An insurance company has a payout of health benefits of $100,000. Admin?istrative expenses on top of that are $30,000, and profits are $10,000. The ratio of premiums to benefits is?

Question

Quizplus · Accepted Answer

The total premiums collected must cover the benefits, administrative expenses, and profits. Therefore, premiums = $100,000 (benefits) + $30,000 (expenses) + $10,000 (profits) = $140,000. The ratio of premiums to benefits is $140,000 / $100,000 = 1.4.

An Insurance Company Has a Payout of Health Benefits of $100,000