Chapter 0 - Introduction

Question 1

Reasons for limited consumer ability to make rational decisions

Answer 1

-Death/health not being a rational good (prepared to spend large amounts)
-Disconnect with sense of funding if not direct funder
-Consumer may not be in fit state to decide for themselves
-Information asymmetry:
–Irregular consumption of health care services
–Varying experiences between individuals
(Biological element beyond the control of the actual service)

Question 2

Increasing costs

Answer 2

-Technology advancing
-Increase in demand:
–Aging population
(–Affluence?)

Question 3

Actuarial Control Cycle

Answer 3

-

Question 4

Product Cycle

Answer 4

-Design
-Pricing
-Marketing (/sales)
-Underwriting
-Claims management
-Experience monitoring
(also feeds back into pricing)
-Valuation
-Product design

Question 5

Approaches to underwriting

Answer 5

• Full medical underwriting
• Moratorium underwriting
• Medical history disregarded (MHD)
• No worse terms (NWT)
• Continued personal medical exclusion (CPME)