Aditya Birla Sun Life Insurance Company Limited

Standard Risk

4.5
Rated by 1 readers

Definition:

Insurance risk that the underwriters of the insurance companies consider common or normal is called standard risk. The standard risk is associated with almost all life insurance applicants.

Description:

Insurance companies scrutinise every proposal before accepting the risk. If the risk is profitable, the probability of the insurance company making a profit is high. This is why the insurers segregate their risk into types of risk that include standard risk, substandard risk, and poor risk. Profitable risk for the insurance company can be offered without premium loading or any cover restrictions.

When the proposer applies to buy a health plan and is said to have all healthy habits, she/he will be considered a standard risk for which the commonly applied premium rate will work. On the contrary, if the proposer is found to have a smoking or drinking habit, the proposer will be considered a substandard risk.

The standard risks are insured on the standard premium rate because they pose less challenge for the insurance company.

Example:

Mohit was a 28 years old guy. He applied to buy a term insurance policywith coverage ₹1 Cr. The insurance company conducted the risk analysis on his application and considered him a standard risk. Because Mohit was a healthy male, he was used to regular exercise and yoga. Plus, he did not have any bad habits of smoking or consuming alcoholic beverages. Hence the insurer offered him the cover of ₹1 Cr at the standard price of ₹ 948 per month.

How much helpful you found for you?

4.5
Rated by 1 readers
0 / 5 ( 0 reviews )
Not helpful
Somewhat helpful
Helpful
Good
Best
Don’t forget to share helpful information in your circle

Thank you for your details. We will reach out shortly.

Thanks for reaching out. Currently we are facing some issue.

Buy ₹1 Crore Term Insurance at Just ₹508/month*

Please enter a valid First Name.
+91Icon Phone
Please enter a valid Mobile Number.
*This field is required.
Plan Logo

ABSLI Salaried Term Plan

Exclusively For Salaried Individuals

Icon-Illustration Insurance

4 Plan Options

Icon-Whole life cover

Life Cover upto 70 years

ICON-CLICK

Optional Accelerated Critical Illness benefit

ICON-CLICK

Inbuilt Terminal Illness Benefit

Life Cover
₹1 crore

Premium:
₹508/month*

ABSLI Salaried Term Plan (UIN:109N141V02) is a non-linked non-participating individual pure risk premium life insurance plan; upon Policyholder’s selection of Plan Option 2 (Life Cover with ROP) this product shall be a non-linked non-participating individual savings life insurance plan.
*LI Age 21, Male, Non Smoker, Option 1: Life Cover, PPT: Regular Pay, SA: ₹ 1 Cr., PT: 10 years, Annual Premium: ₹ 6100/- ( which is ₹ 508.33/month) Premium exclusive of GST. On death, 1 Cr SA is paid and the policy terminates.
ADV/9/22-23/1534