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
Attributes of a particular employee benefit plan. For example, a general characteristic of group life insurance is that the whole group is underwritten, not individual members. ...
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Section of the code that qualifies that the death benefit paid under a life insurance policy is received by the beneficiary income-tax free. These tax consequences apply regardless of the ...
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Cost per unit of insurance. ...
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Type of proportional reinsurance under which the ceding company (primary insurer) cedes a portion of the face amount of the life insurance policy it has underwritten to its reinsurer. The ...
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