Course wk #4 1) How do you account for the feeling held by many people that some
ID: 388498 • Letter: C
Question
Course wk #4 1) How do you account for the feeling held by many people that something is almost "immoral" about an insurance company canceling a policy in the middle of the policy term? Do you agree or disagree with this position? 8 2) A noted insurance authority stated, "The insured should prefer to purchase insurance from a company that has a high loss ratio since this is evidence that the company is returning a high percentage of the premium dollars collected to its customers." Explain why you agree or disagree with this position.Explanation / Answer
1) Yes, I do agree that it is totally "immoral" for an insurance company to cancel a policy in the middle of the policy term as it leaves the customer in distress and lot of risk in case of any issue during that phase. Moreover, every insurance company has a clause of maturity wherein certain sets of benefits are available after some time frame. If the policy in cancelled, customer will have to search for new vendor and restart the process. Firstly, all the benefits of past policy maturity will be at risk. Secondly, it forces customer to again go through all the pain of documentation, reading terms and conditions, alignment etc. before making final agreement. Hence, it is not correct and highly unprofessional if insurance company cancels policy in the middle of term.