Question

What is decreasing extra risk?

a.

When the risk associated with an individual is low at the time of commencement of policy, but there is a chance of that risk becoming high after a certain period

b.

When the risk associated with an individual is high at the time of initial underwriting but decreases over a period of time as time elapses

c.

When the risk associated with an individual is considered to remain constant over the period

d.

When the risk associated with an individual is slightly sub-standard to substantially sub-standard

Answer: (b).When the risk associated with an individual is high at the time of initial underwriting but decreases over a period of time as time elapses Explanation:Decreasing extra risk is the opposite of increasing extra risk. The risk associated with an individual is high at the time of initial underwriting but decreases over a period of time as time elapses.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. What is decreasing extra risk?

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What is constant extra risk?

Q. What is an example of constant extra risk?

Q. What is standard risk?

Q. What is adverse selection?

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

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

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

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

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

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?

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

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

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

Q. Why is it difficult to administer an increasing extra premium for increasing risk?

Q. What is diminishing lien?

Q. When is a reduced basic sum assured paid in a policy with a diminishing lien?

Q. How does the amount of debt in a policy with a diminishing lien change over time?

Q. When does the debt in a policy with a diminishing lien get fully cancelled?

Q. What happens to the bonuses in a policy with a diminishing lien?

Q. What happens if death occurs due to accident in a policy with a diminishing lien?

Recommended Subjects

Are you eager to expand your knowledge beyond IC22 Life Insurance Underwriting? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!