MTHEL131 Chapter Notes - Chapter 25: Nuclear Family, Medical History, Disability Insurance

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Causes adverse selection where more people in a high risk environment will get life insurance, since people have freedom to buy or not, choose the plan of insurance and to persist or discontinue a plan. Better knowledge about the insured and causes of mortality and morbidity. Able to price insurance better and have a. Gives drive towards product and pricing innovation: goals: Permit economic incentives, thus spreading availability of insurance. Strict underwriting process of long-term non-cancellable disability insurance. Post-claim underwriting charges that insurance companies purposely issues insurance with minimal underwriting to save money, but then underwrite strictly at time of claim to not allow the claim to happen. Relations of insurance to loss moral safeguard in underwriting that ensures a reasonable relationship between insurance benefit and the amount of potential loss. Underwriting and genes: due to the development of dna analysis, some underwriters are considering doing dna testing for abnormal genes. Medical care insurance should be a public good.

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