Long-Term Care✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Adverse selection in long-term care insurance occurs most directly in which situation?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Adverse selection describes the tendency of higher-risk individuals — those already impaired or anticipating care needs — to seek insurance disproportionately. In LTC, this shows up as applications from people with failing health or early cognitive decline, which is why LTC underwriting scrutinizes health, age, and cognitive status. AH-I.A.15 anchors adverse selection and risk distribution for the A&H line.
Why the other options are wrong
- B) Marketing to healthy young buyers is the opposite dynamic and actually improves the risk pool.
- C) Level issue-age pricing is a normal rate design, not a cause of adverse selection.
- D) Guaranteed renewability protects policyholders; it is unrelated to the adverse-selection dynamic.
Memory hook
Adverse selection = the sick knock first; healthy buyers need a nudge.