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:

Bargaining

A stage of grief involving negotiation or compromise to avoid a loss or minimize its impact.

Active Listening

A communication technique involving fully concentrating, understanding, responding, and then remembering what is being said.

Pancreatic Cancer

A type of cancer that develops in the tissues of the pancreas, an organ in the abdomen that aids in digestion and blood sugar regulation.

Kübler-Ross

A model outlining five stages of grief (denial, anger, bargaining, depression, acceptance) proposed by Elisabeth Kübler-Ross.