General Studies · Insurance
Which of the following options most accurately defines 'Risk-Classification' in insurance?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The grouping of applicants into identical premium bands without evaluating individual medical or hazard criteria.
- 2The core underwriting decision of whether or not to issue an insurance policy to an applicant and under what financial terms.
- 3The adverse selection tendency of individuals who expect high losses to eagerly purchase high amounts of insurance coverage.
- 4The process in which individual lives are evaluated, categorized, and assigned to different risk classes depending on the degree of risk they pose.✓
Correct answer
The process in which individual lives are evaluated, categorized, and assigned to different risk classes depending on the degree of risk they pose.
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