Question: Adverse selection in insurance is:when insureds take greater risks because they have coverage.an insurer's practice of only choosing low-risk applicants.the cancellation of policies when risk

Adverse selection in insurance is:when insureds take greater risks because they have coverage.an insurer's practice of only choosing low-risk applicants.the cancellation of policies when risk becomes too high.the tendency of high-risk individuals to seek insurance at standard rates.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

Please address all chapter questions Chapter 7 10. Consider an individual whose utility function over income I is U(I), where U is increasing smoothly in I (U > 0) and (U

Question (1) Indicate whether the statement is true, false, or unclear, and justify your answer. a, When the price elasticity of demand for health care is zero, health insurance coverage induces no...

PART 1 - Externalities (10 points) A pharmaceutical firm recently received FDA approval for ColdVax, a vaccination that provides immunity against the common cold. The vaccine greatly reduces the...

3. (20p) The Massachusetts health reform, which was signed into law in April 2006, became a model for the national reform (the ACA), which was enacted in March 2010. Hackman, Kolstad and Kowalski...

In the early 2000s, the state of Massachusetts in the US implemented a health reform aimed at enrolling people without health insurance into an insurance plan. The reform required people without...

In the early 2000s, the state of Massachusetts in the U.S. implemented a health reform aimed at enrolling people without health insurance into an insurance plan. The reform required people without...

What is meant by the phrase adverse selection in insurance? Although discussed in this chapter in connection with term insurance, adverse selection is a problem in all insurance markets. What is the...

True or False and Explain please: 1. The index in an index insurance contract should be highly correlated with the actions that farmers take to reduce the probability of harvest failure. 2. The Net...

Question 2 8 pts Which of the following techniques is a common tool used to mitigate the risks of moral hazard and adverse selection in insurance contracts? Limited Liability Loss reserve funds Hold...

How do we assess the quality of software design? How are the concepts of coupling and software portability related? Give examples to support your discussion. Give one example for each of these...

Q1: The following data were collected while running a closed traverse ABCDA. Calculate the missing data. Line Length (m) Bearing 330 AB 18125 BC 8950 CD 411 35500 DA 827

What was IBM's defense in its mainframe computer antitrust case?a . the government had not correctly identified the relevant marketb. there were no illegal per se activities committedc. IBM need its...

What is SQL DROP TABLE Statement??