Question

Why is careful underwriting and risk classification essential in insurance?

a.

To make all risks equal

b.

To lower the premium for all policyholders

c.

Because all risks are not equal, and each risk needs proper assessment

d.

To simplify the underwriting process

Posted under IC38 Life Insurance Agent Exam

Answer: (c).Because all risks are not equal, and each risk needs proper assessment Explanation:Careful underwriting and risk classification are essential in insurance because all risks are not equal, and each risk needs to be assessed and priced appropriately.

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Q. Why is careful underwriting and risk classification essential in insurance?
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