Blood tests administered to applicants for medical insurance are an example of an attempt by insurance companies to deal with the problem of

Question

Quizplus · Accepted Answer

Blood tests are typically used to detect certain medical conditions or risk factors that could increase the likelihood of future claims. Insurance companies administer blood tests to weed out applicants who are already sick or at high risk of becoming so. This is an attempt to mitigate the problem of adverse selection, which occurs when the people with the highest risk of needing insurance are the most likely to seek it out.

Blood Tests Administered to Applicants for Medical Insurance Are an Example