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

question 79

Multiple Choice

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

• A) that increase benefits dramatically once the policyholder is discovered to have contracted an illness so that the patient can recover sooner.
• B) containing provisions which either reduce or eliminate benefits to persons who contract prespecified illnesses.
• C) boosting the amount the companies will pay health providers in the event that claims are submitted by policyholders.
• D) with only A and B of the above provisions.

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Definitions:

Heirs

Individuals legally entitled to receive property from a deceased person's estate under a will or through intestacy.

Beneficiaries

Individuals or entities entitled to receive benefits or funds under a will, trust, insurance policy, or other financial arrangement.

Constructive Eviction

A situation in which a landlord's actions, or failure to act, substantially interfere with a tenant's enjoyment of the leased property, effectively forcing them to move out.

Discharge

The release or exemption from a contractual obligation or other legal liability.