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Risk selection assesses the insurance applicant in a systematic procedure to ascertain the risk classification for possible coverage. This is used to prevent anti-selection and maintain quality business.

The underwriting factors are physical, occupational, financial, moral, avocation, and residence or travel.



Physical includes age, built, personal medical history, and family history. These physical factors can help the insurance company to determine how likely the insurance applicant can acquire the critical illness or even assess his health. These factors affect the amount of premium that the applicant will pay for his policy.



There are specific jobs that are considered high risk due to their occupational hazards. If an applicant’s position requires him to travel a lot, this exposes him to a high possibility of having an accident during travel.



In purchasing life insurance, the insurance company wants to make sure that the applicant can pay the premium. If his financial capability is not in excellent condition, the insurance company will cover the death benefit according to his income.



These are usually the lifestyle of the applicant. The lifestyle of an applicant determines his well-being.



If the insurance applicant has a hobby that is a high risk, such as sky-diving or car racing, this may affect the amount of premium that the applicant will pay. High-risk hobbies have a higher probability of having an accident than those low or medium-risk hobbies.



The residence determines if there are specific health issues that may be considered high risks, such as contracting infectious diseases in your place or location. If the insurance applicant does business travel a lot, this may be deemed to be high risk.

Risks have different classifications, and these are Standard, Substandard, Declined, Postponed, and Anti-Selection.

Standard Risk

An applicant may be considered a risk if he is in average life expectancy and the moral is normal. Premiums for this classification are also standard.


The mortality of the applicant is higher than usual. Therefore the average life expectancy is shorter. The applicant may be considered substandard if he is involved in some high-risk avocation. The premiums of this classification are higher than the standard.


The applicant is not acceptable. This is maybe due to highly hazardous occupations or feeble health.


The applicant may be insurable, but his application has to be delayed due to pregnancy or undergoing therapy.


This occurs when an applicant who participates in a dangerous hobby or with hazardous occupations or an impaired health condition is anxious to get life insurance.

So if you are planning to get life insurance, expect that your age, lifestyle, avocation, and, most especially, your health affect your coverage and your premium. While young and healthy is the best time to get life insurance with a lower premium and good range.