Numerical Rating System

Definition of "Numerical rating system"

Mary Kay Carter real estate agent

Written by

Mary Kay Carterelite badge icon

Realty One Group Freedom

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.

Comments for Numerical Rating System

Alex Mawene Alex Mawene said:

what are the underwriting conditions

Aug 21, 2021  05:29:40

 
Real Estate Agent

Hey 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  10:17:31
 
 
image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Liquor liability legislation in 20 states under which a dispenser of alcoholic beverages is held responsible for bodily injury and/or property damage caused by its customers to a third ...

Accrediting body for the CPCU (Chartered Property and Casualty Underwriter) designation. The institute provides undergraduate and continuing education in property and casualty insurance ...

Record of losses and premiums received for accident coverage within a 12-month period. These statistics show the percentage of each premium received that is being paid out in claims and ...

Situation involving a chance of a loss or no loss, but no chance of gain. For example, either one's home burns or it does not; this risk is insurable. ...

Insured's income prior to the disability minus the insured's income after the disability. ...

Period, set by law, after which a damage claim cannot be made. Limits are set by individual states and usually range from one to seven years. ...

Health insurance that is not subject to alteration, termination, or increase in premium upon renewal. ...

Covers property damage and theft coverage in two areas not subject to a coinsurance requirement or a deductible. Coverage A. If the bank becomes liable for loss to a customer's property ...

In property and casualty insurance, contract section containing such information as name, description, and location of insured property; name and address of the insured; period a policy is ...

Popular Insurance Questions