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
Same as term Convertible Term Life Insurance: coverage that can be converted into permanent insurance regardless of an insured's physical condition and without a medical examination. The ...
Charitable planning strategy under which a donor transfers title to his or her residence or farm to the charity. Upon transfer of title, the donor reserves the right to occupy the property ...
Expenses taken out when benefits are paid. For example, a specific dollar amount is subtracted from a monthly income payment for company expenses. ...
Extent of the loss caused by accidents. Used in predicting the dollar amount of losses upon which the premiums are based. ...
Payments in excess of the value of the loss a prohibited practice. When an insured has more than one policy covering a risk, the full value cannot be collected from each policy if a loss ...
Organization of over 300 property and casualty insurance companies whose mission is to investigate fraudulent claims and bring to justice those making such claims. ...
Elements within a group under study that have the same characteristic (s), have the same expectation of loss, are very much alike with respect to the variable under consideration, and do ...
Amount that each member of a pool contributes to that pool. ...
Rules stating that, for any portion of the payment made to the employee from an eligible rollover distribution, the plan administrator is required by federal law to withhold 20% of the ...
Have a question or comment?
We're here to help.