Arkansas Life and Health Insurance Practice Exam

_______________ is the process of selection, classification, and rating, and determining if someone is insurable.

1. Application

2. Home office underwriting

3. Policy delivery

4. Risk assessment

The correct answer is: Application

In the insurance industry, the process of selection, classification, and rating, to determine if an individual is insurable, is known as underwriting. The underwriting process involves assessing the risks associated with insuring a particular individual or entity. The application submitted by the insured is a crucial part of the underwriting process as it provides the necessary information for the insurer to evaluate the risk involved. Therefore, the correct answer is "A. Application." Option B, Home office underwriting, refers to the process where the insurance company's home office reviews and evaluates the underwriting decisions made by field underwriters. Option C, Policy delivery, is the stage in the insurance process where the policy is delivered to the insured after underwriting and acceptance. Option D, Risk assessment, is a general term that may be a part of the underwriting process but does not encompass the full scope of selection, classification, and rating to determine insurability as specifically as the application does.