California Life and Health Insurance Practice Exam 2025 – Your All-in-One Guide to Exam Success!

Question: 1 / 400

Which of the following is NOT a risk classification used by underwriters?

Health risk

Occupational risk

Dividend risk

Underwriters use various risk classifications to assess the likelihood of a policyholder making a claim, which helps set appropriate premiums. Health risk involves evaluating an individual's medical history and current health status to determine the potential for future claims. Occupational risk pertains to the nature of a person's job and the associated hazards, which can impact their overall risk profile. Gender risk recognizes that statistical differences in life expectancy and health conditions can exist between genders, influencing underwriting decisions.

On the other hand, dividend risk is not a classification used in underwriting. Dividends are payments made to policyholders from the surplus earnings of mutual insurance companies and are not directly tied to the assessment of individual risk factors for underwriting. Thus, dividend risk does not fit within the underwriting process as a risk classification.

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Gender risk

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