Which of the following statements about adverse selection is most correct?
A. Adverse selection means those individuals with greater health risk are more likely to purchase health insurance
B. The adverse selection problem exists because of asymmetric information (applicants have better knowledge of their health status than insurers have)
C. Historically, underwriting provisions were used to minimize the adverse selection problem
D. Statements a and b are both correct
E. Statements a, b, and c are all correct
Ans: E. Statements a, b, and c are all correct
You might also like to view...
What elements may help to create a product image?
What will be an ideal response?
When the single liability limit is the same as the limit per accident on a split liability limit policy,
A) the better coverage will depend upon the number of people involved in the accident and the severity of the physical injuries. B) both policies will provide identical coverage. C) the split liability limit will provide the better coverage. D) the single liability limit will provide the better coverage.