Insurability
Insurability refers to the assessment of an individual’s or entity’s eligibility for insurance coverage based on various factors that influence risk. Insurance companies evaluate insurability to determine whether to offer coverage and at what premium rate. Key factors considered include health status, risk profile (including age, occupation, lifestyle, and location), and financial stability.
Insurability assessments help insurers manage risk effectively by ensuring that policies are issued to applicants who are likely to maintain the terms of the insurance contract and not pose excessive financial risk. Applicants with higher insurability are typically offered coverage at lower premium rates, reflecting their lower risk profile and likelihood of filing claims. Understanding insurability criteria is essential for individuals and businesses when applying for insurance to determine their eligibility and potential costs of coverage.