A life insurance company will often require an applicant to submit to a brief physical exam to assess that person's basic level of health.This practice is a form of _____ to lessen the problem of _____.
A) diversification;moral hazard
B) signalling;deductibles
C) reputation;adverse selection
D) screening;adverse selection

Question

Quizplus · Accepted Answer

The practice of requiring a physical exam is a form of screening, which helps to identify individuals who may have greater health risks and are more likely to file claims, thereby reducing the problem of adverse selection.

A Life Insurance Company Will Often Require an Applicant to Submit