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
Contribution whose purpose is to increase funding of underfunded pension plans. It is part of the calculation that is made to arrive at the plan's minimum funding requirement. Usually a ...
Coverage when a director or officer of a company commits a negligent act or omission, or misstatement or misleading statement, and a successful libel suit is brought against the company as ...
Ruling that, under current tax law, if an insurance company is to use a loss carryforward accounting adjustment, the company must first offset a net income loss in a specified time period ...
Policy that combines life insurance coverage on two lives and pays policy proceeds on the second person's death with the accumulation potential of an underlying variable investment ...
Contributions (under qualified employee benefit plans, such as pensions and health insurance) made by an employer on behalf of employees, deducted as a business expense for tax purposes. ...
Annuity modified joint life and survivorship annuity under which the income payments are reduced to one-half or two-thirds of the initial income amounts upon the death of the first ...
Practice of selling those securities whose price has increased and retaining those securities whose price has declined. The securities that have declined are listed at their amortized value ...
Property coverage on a dealer's interest in equipment while it is being installed. Labor and material are protected against such perils as fire, lightning, and windstorm. For example, if an ...
Situation wherein the agent's conduct causes a client or prospective insured reasonably to believe that the agent has the authority to sell an insurance policy and contract on behalf of the ...
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.