Numerical Rating System
Definition of "Numerical rating system"
Underwriting method used in classifying applicants for life insurance according to certain demographic factors and assigning weights to these factors. Factors include physical condition, build, family history, personal history, habits, and morals. For example, if an applicant is 5 feet 8 inches and weighs 250 pounds, his mortality expectation based on this height-weight ratio may be 160% of a standard risk who weighs 150 pounds at that height. In this instance a debit of 60 percentage points would be listed next to the weight factor on the applicant's underwriting sheet. If the applicant has an excellent family history (no hereditary diseases such as diabetes), his mortality expectation based on this factor is 90% of the standard risk. Here a credit of 10 percentage points would be listed next to the family history factor. Upon completion of the debiting/crediting process, debits and credits would be totaled for a final rate, which would classify the applicant as standard, substandard, or an uninsurable risk.
Popular Insurance Terms
Coverage on an all risks basis for goods in transit, bailment, and while on the premises of others. ...
Physical damage to one's person. The purpose of liability (casualty) insurance is to cover bodily injury to a third party resulting from the negligent or intentional acts and omissions of ...
Risk that premiums and reinsurance, as well as other receivable instruments, will not be collected. ...
Same as term Tabular Plans: retrospective rating system with basic, minimum, and maximum premium rates listed in manual tables. Calculation of an individual premium involves adjusting the ...
In reinsurance contracts, clause that requires the re-insurer to provide coverage if an underlying carrier is unable to fulfill its obligations under the policy ceded to the re-insurer. ...
each individual has an unlimited insurable interest in his or her own life, and therefore can select anyone as a beneficiary. parent and child, husband and wife, brother and sister have an ...
Right of the policy owner as listed in a policy. An insured has the right to exercise all privileges and receive all benefits of the policy except when restricted by the right of an ...
In umbrella liability insurance clause that stipulates that in the event of a loss where there are no underlying policies providing coverage, the deductible will apply. ...
Professional designation conferred by the International Foundation of Employee Benefit Plans and the Wharton School of the University of Pennsylvania. In addition to professional business ...
Comments for Numerical Rating System
what are the underwriting conditions
Aug 21, 2021 05:29:40Hey Alex! Thank you for reaching out to us. The interesting thing about your question is that you can only find your answer with each individual insurance company. Each company has its own system of calculating the underwriting conditions for calculating the risk of death because, in this case, we refer to life insurances. The method of calculation is highly complicated, and it is its own field of study. It is called Actuarial Mathematics, and there are countless formulas used and percentages applied. You should contact your insurance broker or agent for more detailed information as they have more expertise with this than us.
Aug 23, 2021 10:17:31Have a question or comment?
We're here to help.