Question

Fund life & health insurance

Explain carefully why this sentence is false

Because a homogeneous group in underwriting is rather important, smaller risk group tis always better than larger risk group.

Answer 1

The given statement is FALSE as when there would be a homogeneous group in underwriting, there will be a PREFERENCE FOR A LARGER RISK GROUP THAN THE SMALLER RISK GROUP, because when there would be a similar characteristics of individual in larger group it will be better to manage as because the group will be completely homogeneous so the preference will be for the larger group than the smaller group

In a homogeneous group, there will be similar characteristics so wider the population more the advantage for the company.