Adverse selection occurs when a proposed insured who is already critically ill applies for life insurance. This is considered adverse selection because it increases the risk to the insurer. It can also create an inadequacy in the rate structure because the insurance company is charging a rate for a healthy person with lower risk.

About LifeTips

Now one of the top on-line publishers in the world, LifeTips offers tips to millions of monthly visitors. Our mission mission is to make your life smarter, better, faster and wiser. Expert writers earn dough for what they know. And exclusive sponsors in each niche topic help us make-it-all happen.

Ask a Question

Not finding the advice and tips you need on this Life Insurance Tip Site? Request a Tip Now!

Guru Spotlight

Mary White

Ever wonder how you could make your life better and more fun? So have tens of millions of fans who have turned to LifeTips for answers over the past decade. We keep the tips, advice, books, podcasts and writing services flowing, so you can keep your life and business growing in the right direction. Upward!