As far as insurance is concerned, Risk can be defined as “situation where the probability of a variable (such as burning down of a building) is known but when a mode of occurrence or the actual value of the occurrence, that is whether the fire will occur at a particular property is not known. A risk is not an uncertainty (where neither the probability nor the mode of occurrence is known, a peril (cause of loss) or a hazard (something that makes the occurrence of a peril more likely or more severe, and this is how risk is in life insurance.
Overall health and pre-existing medical condition: The health of a human being and lifestyle are the main factors that the insurers will evaluate. When you apply for life insurance, the insurer will provide a medical questionnaire for you to disclose any existing or past conditions that may existing or past conditions that you may have suffered from, plus any treatment you are undergoing or have had. Falling to disclose any relevant information can let the insurer cancel your policy without refund or deny a future claim
Lifestyle factors, smoking, heavy drinking or recreational drugs use can be considered high to insurance companies. Higher premiums are directly related to any lifestyle factors that come with increased medical costs or a raised chance of disability or death. To get a detailed view of your health, the insurer will ask about.
High risk activities: If a person is sky diving, bungee jumping, racing motorcycles, extreme sports or any other dangerous hobby. Your life insurance company might see your past time as an expensive accident waiting to happen. High risk hobbies are a distinct risk factor and many policies will flat-out excluded specific pastime you might find a provider to insure you but at an extra cost that could be expensive.
Occupation are assessed based on the nature of the work and perceived level of risk jobs including agriculture, fishing, mining and construction are seen by the insurer as having an increased risk of death or injury and result in higher premiums.
Generally risk in life insurance is determined in many ways. As mentioned and explained to you but if one commits suicide there will be no compensation, because that would mean, the insurer had the aim of killing himself/herself.
#The summary was prepared by Scholastica, a student at moshi cooperative university
