New Jersey Life Producer Practice Exam

Question: 1 / 400

What does the term "underwriting" mean in life insurance?

Reviewing claims submitted by policyholders

The assessment of risk to determine policy premiums

Underwriting in life insurance refers to the assessment of risk to determine policy premiums. This process involves evaluating an individual's health, lifestyle, medical history, and other factors to estimate the likelihood of a claim being made. By analyzing this information, underwriters can set the appropriate premium that reflects the level of risk associated with insuring that individual.

This is a critical step in the life insurance process because it ensures that the insurer can maintain financial stability while offering policies to those who need them. A well-conducted underwriting process not only protects the insurance company from adverse selection but also helps in tailoring policies that meet the needs of applicants based on their risk profiles.

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A process for filing a claim

The adjustment of policy coverage limits

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