Life Insurance Companies Require That Prospective Policy Holders Have a Medical

question 18

Multiple Choice

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

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Definitions:

Amygdala

A part of the brain's limbic system, instrumental in processing emotions, emotional behavior, and motivation, particularly those related to survival and fear responses.

Olfactory Bulb

A brain structure involved in the sense of smell, processing information from olfactory receptor cells.

Occipital Lobe

The region of the cerebral cortex located at the back of the brain, primarily involved in processing visual information.

Sympathetic Nervous System

The subdivision of the autonomic nervous system that mobilizes bodily resources and increases the output of energy during emotion and stress.