If a life insurance company does not require a medical exam of its policyholders,it is most likely that the company
A) charges above-average premiums.
B) charges below-average premiums.
C) charges no premiums.
D) has only very healthy policyholders.

Question

Quizplus · Accepted Answer

Without requiring a medical exam, the insurance company cannot accurately assess the health risks of its policyholders. To compensate for this lack of information and the potentially higher risk of insuring individuals with unknown health conditions, the company is likely to charge above-average premiums to cover the increased risk.

If a Life Insurance Company Does Not Require a Medical