Self-selection
Definition of "Self-selection"
Effort of a poor risk to seek insurance coverage. The onset of a health problem such as heart disease, for example, may prompt a person to apply for life insurance before seeking medical treatment. Such applicants, if not screened out, would weight the insured pool toward bad risks. The underwriting process is intended to counter the natural tendency toward self-selection among insurance applicants, either by requiring higher rates for poorer risks or by denying them coverage.
Popular Insurance Terms
Individual who works in the home office of an insurance company and performs the function of underwriting to determine if an applicant is insurable at standard rates, substandard rates, ...
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Same as term Associate in Risk Management: professional designation earned after the successful completion of three national examinations given by the insurance institute of America (IIA). ...
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