Question

Which statement BEST explains why insurance companies charge higher premiums for high-risk individuals and events? A) High-risk events occur more often than low-risk events. B) These people pay higher federal and state income tax rates. C) The risk of monetary loss is greater for these people and events. D) High-risk individuals spend more money than low-risk individuals.

Answer 1

C

Step-by-step explanation:

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Answer 2

The correct answer is letter C.

The physical condition of an applicant is the most important factor when determining which premium the insurance company shall offer. Insurance companies charge higher premiums for high-risk individuals because their life expectancy is shorter and the risk of monetary loss is greater for these people and events.