Question

What is the purpose of postponing life insurance offers for individuals with initial high-risk period?

a.

To increase the premium amount for the policy

b.

To reduce the risk for the insurance company

c.

To avoid insuring high-risk individuals

d.

To make the underwriting process more efficient

Posted under IC22 Life Insurance Underwriting

Answer: (b).To reduce the risk for the insurance company Explanation:When the initial risk associated with an individual is unacceptable at the time of underwriting, but is expected to improve over a period of time, then the life insurance offer can be postponed for a certain period. After the initial high-risk period has elapsed, the applicant would be evaluated and assessed afresh at that point of time. This helps the insurance company deal with reduced risk after the period of high risk has elapsed, thus reducing the overall risk for the company.

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Q. What is the purpose of postponing life insurance offers for individuals with initial high-risk period?
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