Asked by Chelsea Lewis on Jun 27, 2024
Verified
Life insurance companies require that prospective policy holders have a medical check‐up before the companies will sell the policy because of a(n) ________ problem in which the insured could be ________ than expected.
A) moral hazard; healthy and live longer
B) moral hazard; unhealthy and die sooner
C) adverse selection; healthy and live longer
D) adverse selection; unhealthy and die sooner
Life Insurance Companies
Financial institutions that provide compensations to beneficiaries upon the insured individual's death, offering financial security and risk management.
Medical Check-up
A comprehensive health evaluation, usually involving various tests, to assess an individual's physical condition and detect any health issues.
Adverse Selection
A situation where sellers have more information than buyers leading to the selection of lower-quality goods or high-risk individuals in markets.
- Become aware of adverse selection and moral hazard complications in assorted markets.
Verified Answer
Learning Objectives
- Become aware of adverse selection and moral hazard complications in assorted markets.
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