Question

A health insurance company may offer its policy-holders a discount on their premiums if they prove that they have stopped smoking. What type of incentive is the health insurance company offering?

Answer 1

a direct incentive

Step-by-step explanation:

Direct incentives are ways to motivate a client to make an investment with the promise that that client will receive a return on that investment directly. An example of this is when a health insurance company may offer its policyholders a discount on their premiums if it proves that it has stopped smoking. Taking out health insurance is an investment and the insurance company promises a return on that investment to the customer who proves that they have quit smoking.