Adverse Selection
Definition of "Adverse selection"
Process in life insurance by which an applicant who is uninsurable, or is a greater than average risk, seeks to obtain a policy from a company at a standard premium rate. Life insurance companies carefully screen applicants for this reason, since their premiums are based on policyholders in average good health and in non-hazardous occupations.
Popular Insurance Terms
Found under the "Exceptions and Exclusions Section for All Medical Benefits" in many health insurance policies that exclude: complications arising from elective, nontherapeutic voluntary ...
Agreement by the insurance company to keep the universal life insurance policy in force, even if the cash value becomes zero or less than zero, provided that a specified minimum ...
Amount of uncertainty in a given situation. Probability that actual experience will be different from what is expected. ...
Employee of a state insurance department who audits statements of insurance companies to determine their continued solvency. ...
Compensation in which an insurance agent's fee for the sale of a policy is the same year after year. Most life insurance companies pay a high first year commission and lower commissions in ...
Coverage in which the face amount of a policy remains uniform, neither increasing nor decreasing for as long as the policy is in force. ...
Annual premium expressed on a proportionate basis such as monthly, quarterly, or semiannually. ...
Chart showing rate of death at each age in terms of number of deaths per thousand. ...
Index that reflects changes in industrial output by manufacturers, mines, electric utilities, and natural gas utilities. This is a monthly index published by the Federal Reserve. ...
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