Practice Quiz

Health and Life Insurance

Category - Theory

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Which of the following is not an advantage of self-insurance?
  1. If the companies losses are less than the premiums, they will save money
  2. Contracts are not regulated by insurance companies
  3. Company has the use of the money
  4. Expenses of carrying insurance are reduced.
Explanation
Answer: B - Contracts not being regulated by insurance companies is not an advantage to self-insurance. When a company decides to self-insure and the contracts are not regulated by an insurance company, if there are problems the department cannot assist consumers with those problems. This disadvantage leaves the consumer attempting to work through any problems that may arise with their coverage on their own. Furthermore, contracts are not subject to the mandated benefit laws.

Theory
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