Question: Alexi has a new baby and decides to buy life insurance. The insurance company asks him to give a blood sample and submit to a medical exam prior to offering a price for the insurance product. They also tell him that he can get a 10% discount every month if he wears a smart watch and logs 30 minutes of exercise at least four times per week and averages at least 6,000 steps per day over the month. The medical exam and blood work is an example of screening. The smart watch discount is designed to limit the effects of moral hazard.