Suppose an insured individuals willingness-to-pay for a medical good is $100 while the market...
Question:
Suppose an insured individuals willingness-to-pay for a medical good is $100 while the market price of that product is $400. What has to be the coinsurance rate so that the person can buy the product?
a) 40%
b) 4%
c) 25%
d) 2.5%
Coinsurance Rate
The coinsurance rate is the percentage of the amount which is to be paid by the insured against the amount of claim after considering all the deductions.
Answer and Explanation: 1
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View this answerCoinsurance rate is option C i.e.25%.
Given information:
- Willingness-to-pay for a medical good is $100.
- Market price of the product is $400.
Coinsur...
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Insurance Coverage for Various Types of Risk
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In the business world, there are various types of risk, which can be covered by different types of insurance. In this lesson, dive into the definitions of different types of insurance coverage, including casualty coverage, liability coverage, E&O coverage, and D&O coverage, in addition to business interruption insurance and key person loss insurance.
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