Adverse Financial Selection
Adverse Financial Selection
1. A situation in which a policyholder cancels an insurance policy because he/she believe he/she can earn a higher return by investing the policy's cash value in a different investment vehicle.
2. A situation in which a policyholder cancels an insurance policy because a financial hardship has forced him/her to use the cash value to pay for other obligations.
2. A situation in which a policyholder cancels an insurance policy because a financial hardship has forced him/her to use the cash value to pay for other obligations.