Question

Surinder is 64 years old and is contemplating taking a two-month long trip to Latin America. Surinder has heard about the perils of having a medical emergency while travelling and has met with an insurance agent to get a quote for travel insurance. Which of the following would cause Surinder’s premium to increase from what he was quoted by his agent? changing his destination to the United States reducing his trip to one-month postponing his trip by a year getting diagnosed with a heart condition
a)		i and ii
b)		i and iii
c)		ii and iv
d)		iii and iv

Answer 1

General Rule: Higher the Risk, Higher the Premium

Reducing the trip to 1 month will reduce risk. So, it will also reduce the premium.

Changing the location will not have any effect, because travelling risk will still be the same.

Postponing the trip will become more risky because, the age will increase, and this can lead to higher premium.

Getting diagnosed with heart condition will also increase the risk. Therefore, it will also increase the premium.

Therefore, (d) iii & iv