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Asked Nov 20, 2019
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If people get higher pay from insurance than their premiums, will this increase or decrease the death rate of average persons? Is this an example of moral hazard or adverse selection? How will an insurance company deal with these problems?

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Answer- If people get higher pay from the insurance than their premium, it will increase the the death rate of average persons.

 Definition - Moral hazard is a situation in which one party gets...

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