The tendency for unhealthy people to seek life or health insurance at standard rates is an example of

Question

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Adverse selection is the tendency for individuals with higher risks or likelihood of making claims to seek insurance at a higher rate than those with lower risks. In this case, unhealthy people are more likely to make claims on life or health insurance policies, which is why they seek insurance at standard rates. This can result in higher costs for the insurance company and potentially higher premiums for other policyholders.

The Tendency for Unhealthy People to Seek Life or Health