Under underwriting, Standard Risk is determined by comparing the applicant's characteristics to which resource?

Under underwriting, Standard Risk is determined by comparing the applicant's characteristics to which resource?

• A. A mortality table.
• B. A credit score.
• C. A medical exam result alone.
• D. A random factor.

Answer: (A)

Underwriting relies on mortality tables to gauge risk. These tables lay out the probability of death at different ages and sexes, providing a baseline for expected mortality. The underwriter compares the applicant’s age, health history, and other health-related factors to those baseline rates. If the applicant’s overall profile aligns with the average for their demographic, they’re classified as standard risk, and standard premium rates apply. A credit score isn’t the primary tool for determining life-insurance risk, a single medical exam result by itself doesn’t establish the rating without context from the table, and random factors aren’t used in this decision.

Underwriting relies on mortality tables to gauge risk. These tables lay out the probability of death at different ages and sexes, providing a baseline for expected mortality. The underwriter compares the applicant’s age, health history, and other health-related factors to those baseline rates. If the applicant’s overall profile aligns with the average for their demographic, they’re classified as standard risk, and standard premium rates apply. A credit score isn’t the primary tool for determining life-insurance risk, a single medical exam result by itself doesn’t establish the rating without context from the table, and random factors aren’t used in this decision.