A person who discovers that he/she has advanced stages of cancer and calls his/her life insurance agent to double his/her insurance policy is an example of:

Question

Quizplus · Accepted Answer

This situation represents the risk of adverse selection, as the individual is seeking to increase their insurance policy after discovering serious health issues. This is a classic example of adverse selection, where individuals with higher risk are more likely to seek out insurance, thereby increasing the risk for the insurance company.

A Person Who Discovers That He/she Has Advanced Stages of Cancer