Selective insurance is usually aimed at group insurance customers. The unit that insures the group insurance will insure the personnel with higher risk in the unit, but the personnel with lower risk will not insure, or the insurance amount of the high-risk group is higher than that of the low-risk group. This situation is called selective insurance. For example, a unit has 10 people, 5 front-line workers and 5 office managers. The insured unit only insures group insurance for 5 front-line employees, not for 5 office workers. This is selective insurance. In insurance companies, this situation is called adverse selection.

Selective insurance is often accompanied by not telling the truth. When an insurance company requires group customers to insure, it requires the unit to truthfully inform the number of units, the number of insured persons, the occupation of insured persons and other information. And it is often impossible to tell the truth when choosing insurance. Because failing to tell the truth will lead to the deviation of the insurance company's risk judgment on the underwriting enterprise, when the unit personnel have an insurance accident and need to make claims, the insurance company can find out through investigation that the unit has failed to tell the truth, refuse to pay or try to reduce the amount of claims. Because failure to fulfill the obligation of telling the truth violates the principle of utmost good faith of insurance.

Property all risks's selective insurance is similar to life insurance, which also refers to the property of the enterprise as the subject matter of insurance. An enterprise only insures the higher-risk part of its property subject matter, but not the lower-risk part. For example, enterprises have different factory management standards, all kinds of disaster prevention and relief measures are comprehensive, one factory is loosely managed, and disaster prevention measures are not in place. Enterprises only insure high-risk factory objects as the subject matter of insurance, and do not insure low-risk property objects, which belongs to selective insurance.