Insurable Risk in Health Insurance: Assignment
Added on 2020-04-01
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1)i.Insurable risk does not exist. This is because rusting occurs due to tear and wear. The value of the product reduces by rusting. Therefore rusting is a deterioration that occurs within a lifespan of an iron (Anbarci, 2015).ii.Insurable risk exists. This is because genetic disorders can be insured under health insurance.iii.Insurable risk exists. Developing cancer can be insured under health insurance.iv.Insurable risk does not exist. A computer operates under certain duration. It will finally stop working since it is prone to wear and tear hence this cannot be insured.v.Insurable interest does not exist. Losing money in the casino is gambling which is different from insurance.2)Importance to the societyi.Medical insurance helps to reduce healthcare cost hence improves health in the society.ii.Insurance helps to pay for the losses that occur. This means that the people will not directly withdraw money from their accounts hence helping the society to manage uncertainty in cashflows (Olivieri, & Pitacco, 2015).iii.Insurance helps to reduce the burden of uncompensated victims of loss in the society.iv.Insurance helps to develop the society since it provides sources of investments.v.Insurance promotes economic growth in the society through mobilizing savings.Importance to individualsi.Insurance helps to compensate individuals hence reducing the lossesii.Insurance provides source of investments to an individual.iii.It acts as a source of saving.iv.It helps retain the financial position of an individual in the event of a loss.v.Medical insurance helps to pay health bills since the company can pay part or the whole bill hence reducing the burden of an individual.3)Physical hard is a situation that is not dangerous but may cause much physical discomfort that cannot be reduced by protective tools or equipments (Zhi-gang, & Han, 2013).Examples:The number of room the restaurant has.The location of the toilets
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