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Insurance

Definition of 'Insurability'


Definition: The characteristic of being acceptable for insurance is called insurability.

Description: Insurability of an individual or object is ascertained depending upon the norms and policies of the insurance company. The various factors that are taken into consideration include risk profile, life expectancy, proneness to disease, injury or accidents, etc.

In case of discovery of a very low insurability, the application is said to uninsurable. This is especially important for the health of the insurance business in the long term as this mitigates the risk of loss associated with adverse selection.

Also See: Insurance, Insurable Risk, Guaranteed Survival Benefit, Guaranteed Surrender Value, Insurability

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