Question

How is the total credit rating for extra mortality calculated for an individual with multiple unfavourable factors?

a.

Each unfavourable factor is considered in isolation and the total is calculated

b.

The combined effect of all unfavourable factors is calculated, which may give a much higher extra mortality rate

c.

Only the highest rated unfavourable factor is considered for calculating the total credit rating

d.

The total credit rating for extra mortality is not calculated for individuals with multiple unfavourable factors

Posted under IC22 Life Insurance Underwriting

Answer: (b).The combined effect of all unfavourable factors is calculated, which may give a much higher extra mortality rate Explanation:When an individual has multiple unfavourable factors, the combined effect of these factors needs to be considered cautiously in underwriting. The total of the individual unfavourable factors that are considered in isolation may not give true results; a combination effect of these factors may give a much higher extra mortality rate than for the individual unfavourable/adverse factors.

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Q. How is the total credit rating for extra mortality calculated for an individual with multiple unfavourable factors?
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