Adverse selection occurs when those ________ likely to get ________ insurance payoffs are the ones who want to purchase insurance the most.

Question

Quizplus · Accepted Answer

Adverse selection refers to the scenario where an insurer is more likely to attract customers who have a higher-than-average likelihood of making a claim. Therefore, choice C is the correct answer because it indicates that the people who will get the largest insurance payoffs are the ones who want to buy insurance the most, meaning they believe they are at a higher risk of needing insurance.

Adverse Selection Occurs When Those ________ Likely to Get ________

Adverse Selection Occurs When Those Likely to Get