In terms of insurance, who would typically be considered a high-risk individual?

In terms of insurance, who would typically be considered a high-risk individual?

• A. Someone with a clean driving record
• B. Someone who has health problems or a history of claims
• C. Someone with a stable job and income
• D. Someone living in a low-crime area

Answer: (B)

A high-risk individual in insurance is typically someone who presents a greater chance of filing a claim based on various risk factors. Individuals with health problems or a history of claims are categorized as high-risk because their medical conditions or previous claims suggest a likelihood of future claims. This increased risk influences insurance underwriting processes and can result in higher premiums or limited coverage options. In contrast, someone with a clean driving record would usually be considered a low-risk driver, as their history indicates responsible behavior and less likelihood of accidents. Similarly, an individual with a stable job and income usually reflects financial stability and a higher likelihood of maintaining insurance payments, thus not categorized as high-risk. Lastly, living in a low-crime area generally correlates with lower risks for insurance claims related to crime, making such individuals more favorable in the eyes of insurers. Therefore, the presence of health problems or a history of claims directly correlates with an increased risk profile, making that choice the most accurate representation of a high-risk individual.

A high-risk individual in insurance is typically someone who presents a greater chance of filing a claim based on various risk factors. Individuals with health problems or a history of claims are categorized as high-risk because their medical conditions or previous claims suggest a likelihood of future claims. This increased risk influences insurance underwriting processes and can result in higher premiums or limited coverage options.

In contrast, someone with a clean driving record would usually be considered a low-risk driver, as their history indicates responsible behavior and less likelihood of accidents. Similarly, an individual with a stable job and income usually reflects financial stability and a higher likelihood of maintaining insurance payments, thus not categorized as high-risk. Lastly, living in a low-crime area generally correlates with lower risks for insurance claims related to crime, making such individuals more favorable in the eyes of insurers. Therefore, the presence of health problems or a history of claims directly correlates with an increased risk profile, making that choice the most accurate representation of a high-risk individual.