Question

What is "moral hazard" in insurance underwriting?

a.

The risk that the applicant will pass away before the policy term ends

b.

The risk that the life assured's worth to his family is perceived to be more when he is dead than when he is alive

c.

The risk that the applicant will not disclose his occupation truthfully

d.

The risk that the applicant will not pay the premiums on time

Posted under IC22 Life Insurance Underwriting

Answer: (b).The risk that the life assured's worth to his family is perceived to be more when he is dead than when he is alive Explanation:"Moral hazard" is the risk that the life assured's worth to his family is perceived to be more when he is dead than when he is alive. This needs to be underwritten with caution.

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Q. What is "moral hazard" in insurance underwriting?
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