(Solved):Adverse selection occurs when a) a person takes more risks that are not known to the life insurance company because he has life insurance. b) a person buys insurance because he has a risky lifestyl… View Answer…

 

Question

Adverse selection occurs when

a) a person takes more risks that are not known to the life insurance company because he has life insurance.

b) a person buys insurance because he has a risky lifestyle that is not known to the life insurance company.

c) a person is a risk lover.

d) pregnant women with health insurance make more doctor visits that uninsured pregnant women.

 

EXPERT ANSWER

The answer to this question is:

b) a person buys

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