Q. Why do insurance companies differentiate between standard and sub-standard risks?

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Q. What is the underwriter's role in risk assessment?

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Q. What is the fundamental principle of life assurance?

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Q. What are the two classifications of risk associated with an individual?

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Q. If an individual is considered low risk and insurable at standard premium rates by insurance companies, what type of risk is associated with the individual?

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Q. What is increasing extra risk?

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Q. What is decreasing extra risk?

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Q. What is constant extra risk?

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Q. What is an example of constant extra risk?

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Q. What is standard risk?

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Q. What is adverse selection?

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Q. Which of the following risks associated with an individual is high at the time of initial underwriting but decreases over a period?

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Q. What criteria can an underwriter use to make a decision on accepting a sub-standard risk?

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Q. What are the possible outcomes of the underwriting process?

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Q. In what situation might an insurance company charge extra premium over the standard rate for accepting a sub-standard risk?

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Q. What is the method of charging extra premium for accepting an increasing extra risk?

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Q. Why might it not be fair to charge a level extra premium to an individual throughout the policy term for a decreasing extra risk?

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Q. How is a temporary extra premium charged for a decreasing extra risk?

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Q. How does an insurance company handle sub-standard risk?

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Q. How does an insurance company charge extra premium for the extra risk associated with an individual?

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