Question

What is the key purpose of underwriting in insurance?

a.

Predicting the exact frequency of losses

b.

Setting the highest possible premium rates

c.

Identifying and classifying risks and determining their acceptability

d.

Creating a separate pool for each policyholder

Posted under IC38 Life Insurance Agent Exam

Answer: (c).Identifying and classifying risks and determining their acceptability Explanation:Underwriting aims to identify and classify risks while determining whether they are acceptable for insurance. It does not aim to predict the exact frequency of losses or create separate pools for each policyholder.

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Q. What is the key purpose of underwriting in insurance?
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