AD Banker Comprehensive Practice Exam

Which factor can impact the premiums for a Medicare Supplement Policy?

1. The insured's age

2. The insured's marital status

3. The insured's country of residence

4. The type of insurance market

The correct answer is: The insured's age

The premiums for a Medicare Supplement Policy are influenced by several factors, and one significant factor is the insured's age. As individuals grow older, they typically face a higher risk of health issues, which insurance companies consider when determining premiums. In many cases, insurers use age-based rating systems, meaning that older individuals may be charged higher premiums than younger individuals for the same policy coverage. This age-based dependency is foundational in health insurance pricing, essentially because older adults may require more medical care, thereby increasing the likelihood that the insurer will have to pay out claims. In contrast, while marital status, country of residence, and the type of insurance market can have some effect on insurance policies in broader contexts, they do not play as critical a role in the pricing of Medicare Supplement Policies specifically as the insured's age does. Thus, age remains the most impactful factor when it comes to setting premiums for these types of policies.