Question

Exclusions for pre-existing conditions help to avoid

A) claims for long hospital confinements
B) adverse selection against an insurer
C) insuring persons who are accident prone
D) more complicated underwriting procedures

Answer 1

Exclusions for pre-existing conditions help to avoid adverse selection against an insurer.

Step-by-step explanation:

Exclusions for pre-existing conditions help to avoid adverse selection against an insurer. Adverse selection occurs in insurance markets when riskier individuals buy insurance, but less risky individuals do not. For example, someone with an underlying medical condition may buy insurance but someone who is healthy will choose not to buy insurance.