West Virginia State Life Insurance Practice Exam

On what basis may an insurance company NOT reject a prospective insured's life insurance application?

1. Gender

2. Health status

3. Occupation

4. Age

The correct answer is: Gender

An insurance company is not allowed to reject a prospective insured's life insurance application based on gender due to regulations that promote gender equality and non-discrimination in insurance practices. This principle stems from broader anti-discrimination laws, which mandate that companies must treat all applicants fairly, regardless of gender. In contrast, health status, occupation, and age can all be significant risk factors that insurers assess when determining an applicant's insurability. Health status reflects the individual's medical history and potential future health risks, occupation can influence risk based on activities or environmental exposure, and age is a crucial factor in assessing life expectancy and, subsequently, risk levels for issuing policies. Insurers utilize these factors to appropriately price premiums and make informed decisions about coverage, but gender must remain a neutral aspect in the underwriting process to ensure equitable treatment of all applicants. This ensures that individuals are not unfairly denied coverage based on characteristics that do not necessarily correlate with risk.