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LLQP (Life Licence Qualification Program) Practice Exam · Question

In the insurance industry, what does 'underwriting' refer to?

Underwriting is the process of evaluating the risk of an applicant to decide whether to issue the policy and at what price (premium).

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Question: In the insurance industry, what does 'underwriting' refer to?

Answer options:

  • The process of selling a policy to a client.
  • The process of auditing an insurance agent's books. ✅ The process of evaluating a risk to determine insurability and premium.
  • The process of paying out a death benefit.

Correct answer: The process of evaluating a risk to determine insurability and premium.

Explanation: Underwriting is the process of evaluating the risk of an applicant to decide whether to issue the policy and at what price (premium).

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