Which term describes charging higher premiums due to hazardous occupations or hobbies?

Which term describes charging higher premiums due to hazardous occupations or hobbies?

• A. Hazardous occupations or hobbies
• B. Per stirpes designation
• C. Revocable designation
• D. Trusts

Answer: (A)

Underwriting looks at risk from a person’s job and hobbies, and when those are hazardous, insurers often apply a higher premium. This practice is known as hazardous occupations or hobbies rating. The higher charge reflects the greater likelihood of a claim within the policy term. For example, someone who works as a firefighter or regularly engages in dangerous sports would typically incur a premium higher than someone with a low-risk occupation or hobbies. The other terms relate to who benefits from the policy or how the policy can be managed, not to premium pricing tied to risk.

Underwriting looks at risk from a person’s job and hobbies, and when those are hazardous, insurers often apply a higher premium. This practice is known as hazardous occupations or hobbies rating. The higher charge reflects the greater likelihood of a claim within the policy term. For example, someone who works as a firefighter or regularly engages in dangerous sports would typically incur a premium higher than someone with a low-risk occupation or hobbies. The other terms relate to who benefits from the policy or how the policy can be managed, not to premium pricing tied to risk.