What is Adverse Selection? | LIFE-HEALTH-INSURANCE, PROPERTY-CASUALTY-INSURANCE Exam Prep

Adverse selection is an insurance phenomenon where higher-risk individuals are more likely to purchase insurance than lower-risk individuals, creating an imbalanced risk pool that can lead to increased premiums and potential market instability. 📚 Learn more about Adverse Selection and other key terms for your LIFE-HEALTH-INSURANCE, PROPERTY-CASUALTY-INSURANCE exam at Open Exam Prep. 🎯 This term appears on: LIFE-HEALTH-INSURANCE, PROPERTY-CASUALTY-INSURANCE 🔗 Full glossary: https://www.open-exam-prep.com/glossary 🔗 Adverse Selection definition: https://www.open-exam-prep.com/glossary/adverse-selection 💡 Exam Tip: Adverse selection = PRE-contract problem. Higher-risk individuals seek insurance more. Underwriting and risk classification are key defenses. Moral hazard = POST-contract behavior change! --- #insurance #examprep #financeexam #life-health-insurance #property-casualty-insurance