Final answer:
The market is relatively competitive for a guaranteed renewable contract, as it keeps the terms stable for the insured while allowing for competition among insurers.
Step-by-step explanation:
Under the following options, the market is relatively competitive for a guaranteed renewable contract. A guaranteed renewable contract allows the policyholder to renew their policy for a set amount of time, and the insurer cannot make any significant changes to the premiums or benefits, hence creating a competitive market.
This is in contrast to a government-mandated insurance contract which is often command-and-control, as the government requires people to have insurance and usually sets the terms.
A lifetime insurance contract and a Cochrane lifetime contract could also be competitive, but they are less common and can involve more significant long-term commitments from the insurer and insured, potentially making them less competitively priced day-to-day compared to renewable contracts.
Under which of the following insurance contract, the market is relatively competitive.
The option that represents a relatively competitive market in insurance is the Guaranteed renewable contract. In this type of contract, the insurance company guarantees the policyholder the right to renew the policy without additional underwriting or medical examination, as long as the premiums are paid.
This creates a competitive market as policyholders have the flexibility to switch insurance providers if they find better offerings or prices.