The Use of Coinsurance Clauses and Deductibles Is an Attempt

question 36

Multiple Choice

The use of coinsurance clauses and deductibles is an attempt by insurance companies to deal with the problem of:

• A)Non-payment of premiums
• B)Adverse selection
• C)Insufficient government regulation
• D)Moral hazard

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Definitions:

Mental Set

The inclination to approach situations with a predetermined framework of understanding, often based on former experiences, that could potentially limit novel solutions.

Functional Fixedness

A mental bias that restricts an individual to utilizing an item solely in its conventional manner, impeding creativity and the ability to solve problems.

Water-Jug Problems

A type of problem that tests one's ability to logically figure out how to measure exact amounts of water using jugs of different sizes.

Unnecessary Constraints

Limitations or restrictions that are not required and may hinder problem-solving or creativity.