Adverse Selection

Adverse selection refers to a situation in which the buyers and sellers of an insurance product do not have the same information available. A common example with health insurance occurs when a person waits until he knows he is sick and in need of health care before applying for a health insurance policy. Source: [https://www.healthinsurance.org/glossary/adverse-selection/](https://www.healthinsurance.org/glossary/adverse-selection/)