Which of the Following Additions to an Insurance Contract Will

question 72

Multiple Choice

Which of the following additions to an insurance contract will not act to reduce moral hazard?

• A)Co-payments for covered costs.
• B)Deductibles for covered costs, that is, the first X dollars of claims are paid by the insured.
• C)Cost caps, that is, limitations on total payments that can be made from a claim.
• D)Age limitations on who can be insured.

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Definitions:

Genetics

Genetics is the branch of biology that deals with heredity and variation in organisms, explaining how traits and characteristics are transmitted from parents to offspring.

Incentive

A thing that motivates or encourages someone to do something, often a reward that induces positive or desired behavior.

External Stimulus

An event or factor outside the body that influences an individual's physiological or psychological response.

Drive-Reduction

A psychological theory that posits the reduction of physiological needs drives behavior, aiming to reduce the state of tension or arousal caused by unmet needs.