Final answer:
An applicant failing to mention severe chest pains while applying for a life insurance policy is an example of Concealment, which is the act of withholding material information from an insurer. Option D is correct.
Step-by-step explanation:
When applying for an individual life insurance policy, an applicant who states that he went to the doctor for nausea but fails to mention severe chest pains is an example of Concealment. Concealment occurs in the context of insurance when an applicant withholds material information that would affect the insurance company's decision to issue a policy or the terms of that policy.
In the case of life insurance, the applicant likely knows more about their personal health history than the insurer can find out, even with a detailed investigation. This asymmetry of information can lead to adverse selection, where those with higher risks may seek insurance while those with lower risks may opt out, potentially driving up the costs for everyone.