Question

What is the purpose of rating the risk in life insurance underwriting?

a.

To accept all insurance applications

b.

To measure the level of risk associated with an individual proposal

c.

To charge higher premiums to policyholders

d.

To decline all insurance applications

Posted under IC22 Life Insurance Underwriting

Answer: (b).To measure the level of risk associated with an individual proposal Explanation:The underwriter rates the risk associated with an individual proposal to measure the level of risk. The rating is based on actuarial means and is used to compare the predicted mortality to the mortality tables. The premium charged is then based on this rating.

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Q. What is the purpose of rating the risk in life insurance underwriting?
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