To Prevent the Moral Hazard Problem,health and Life Insurance Companies

question 30

Multiple Choice

To prevent the moral hazard problem,health and life insurance companies may write policies

• A) for which premiums increase dramatically once the policyholder is discovered to have contracted an illness.
• B) containing provisions which either reduce or eliminate benefits to persons who contract prespecified illnesses.
• C) limiting the amount the companies will pay in the event that claims are submitted by policyholders.
• D) with all of the above provisions.
• E) with only A and B of the above provisions.

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Definitions:

Referral Program

A systematic approach businesses use to encourage employees or customers to recommend qualified candidates for job positions or services.

High Potential

Individuals within an organization identified as having the capability to hold leadership positions and contribute significantly to its success in the future.

Employee Cloning

refers to the practice of hiring individuals who closely resemble the company's existing employees in terms of skills, attitudes, or demographic characteristics, often criticized for limiting diversity.

Internal Sources

Internal Sources refer to the methods or strategies within an organization used to fulfill its needs, including hiring, funding, or gathering information.