Which of the following is not a reason why insurance rates decrease as group size increases? (Cost Advantage)

Question

Quizplus · Accepted Answer

High-risk policy holders tend to stay in small groups or go uninsured, which means that insurance companies have to charge higher premiums to cover their risk. As group size increases, the risk is spread out among a larger pool of people, reducing the impact of high-risk policyholders on the insurance rates. Therefore, high-risk policyholders are not driven away, but rather included in larger groups, which leads to lower insurance rates.

Which of the Following Is Not a Reason Why Insurance