Explanation
is the process insurers use to assess how much risk they are taking on before issuing a policy. Health history, smoking status, occupation, lifestyle, and medical evidence can all influence whether the applicant receives standard pricing, a rating, exclusions, or a decline.
Example
Two applicants seeking the same amount of coverage may receive very different pricing if one has a complex medical history and the other does not.
Common mistakes
Applicants often assume is only about current health. In reality, lifestyle, hazardous activities, and disclosure quality also affect classification.
Summary
Good understanding helps users separate what they want to buy from what they are likely able to buy under current conditions.