A life insurance company worries that people with low risk of dying will not buy insurance because the premium is too high relative to their risk. What problem does this refer to? adverse selection moral hazard free rider negative externality

A life insurance company worries that people with low risk of dying will not buy insurance because the premium is too high relative to their risk. What problem does this refer to? adverse selection moral hazard free rider negative externality

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter9: Insuring Your Health

Section: Chapter Questions

Problem 1FPE

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Adverse Selection

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A life insurance company worries that people with low risk of dying will not buy insurance because
the premium is too high relative to their risk. What problem does this refer to?
adverse selection
moral hazard
O free rider
O negative externality

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