Examkin

Soru

Zorluk: OrtaRisk Classification

During the evaluation of a life insurance application, the home office determines that the applicant, Sarah, has a combination of elevated blood pressure and a family history of early-onset heart disease. Although the underwriter concludes that Sarah is insurable, her overall mortality expectancy is measurably higher than that of an average person her age.

Based on standard underwriting practices, how will the insurer classify Sarah's risk and structure her premium?

  1. Substandard risk; the policy will be issued with a table rating to charge a higher premium compensating for the increased mortality expectation.Cevap
  2. B
    Standard risk; the policy will be issued at the baseline rate, but the insurer will use risk retention by applying a deductible for cardiovascular claims.
  3. C
    Preferred risk; the policy will be issued at a discounted premium, provided a morale hazard exclusion rider is attached to the contract.
  4. D
    Declined risk; the presence of multiple physical hazards legally requires the insurer to reject the application entirely.

Cevap

Substandard risk; the policy will be issued with a table rating to charge a higher premium compensating for the increased mortality expectation.
Because the applicant has a higher-than-average mortality expectation due to health factors, she does not qualify for Standard or Preferred rates. However, since the scenario explicitly states she is insurable, she will not be Declined. Therefore, she falls into the Substandard risk category. Insurers typically manage substandard medical risks by applying a table rating (or rated premium), which proportionately increases the premium to compensate for the elevated risk.

Adım Adım Çözüm

1
Evaluate the applicant's mortality risk compared to average standards based on the scenario data.
The applicant has a higher-than-average mortality expectancy due to blood pressure and family history.
Risk classification depends primarily on whether the expected mortality is lower, equal to, or higher than the baseline average.
2
Determine the appropriate risk classification category.
The applicant is classified as a Substandard risk.
Standard is for average risk, Preferred is for below-average risk, and Substandard is for above-average risk that is still insurable.
3
Identify the standard industry method for adjusting premiums for this risk class.
The insurer will apply a table rating.
Health-related substandard risks are usually managed by charging an extra premium proportioned to the standard rate, known as a table rating.

Anahtar Kavram

Risk Classification

Alternatif Yöntem

Evaluate the risk purely by mortality percentage: Standard is typically equivalent to 100% expected mortality. Since the applicant's risk is higher, she exceeds the 100% threshold, immediately placing her in a Substandard (rated) tier.
Tahmini Süre:1m 0s
Bu soruyu puanla

Konular

Risk Classification

Bu konudan daha fazla soru