12.To prevent adverse selection, health and life insurance companies Question 12 options: a) charge the same premiums to all policyholders. b) require potential policyholders to submit medical records or submit to an examination, and may refuse to sell policies to people with certain pre-existing health conditions. c) charge lower premiums to policyholders with a higher risk of filing claims. d) always charge the same premiums to people regardless of certain pre-existing conditions.

Adverse selection in the insurance industry is defined as a situation in which insurance coverage is…

Answered: 12. To prevent adverse selection,…

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 4PA

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12.

To prevent adverse selection, health and life insurance companies

Question 12 options:

a)	charge the same premiums to all policyholders.

b)	require potential policyholders to submit medical records or submit to an examination, and may refuse to sell policies to people with certain pre-existing health conditions.

c)	charge lower premiums to policyholders with a higher risk of filing claims.

d)	always charge the same premiums to people regardless of certain pre-existing conditions.

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