Question

Which of the following terms describes a situation where an employer keeps the same group health plan for many years?

Select one:
a. Persistency
b. Underwriting
c. Rating
d. Coordination of benefits

Answer 1

Persistency refers to the situation where an employer retains the same group health plan over an extended period and is essential for insurers due to the stable risk pool and continued premium payments.

Step-by-step explanation:

The term that describes a situation where an employer maintains the same group health plan for many years is persistency. In the context of health insurance, persistency refers to the length of time an insurance policy remains in force with the policyholder continuing to pay premiums. It is important for insurance companies because a higher persistency rate often indicates a stable risk pool and ongoing premiums, which can lead to more predictable financial planning for the insurer.