PSI Ohio Insurance Practice Exam

Which factor is NOT typically considered when underwriting an insurance policy?

1. Age of the applicant

2. Financial history of the applicant

3. Personal hobbies of the applicant

4. Educational background of the applicant

The correct answer is: Educational background of the applicant

When underwriting an insurance policy, several factors are typically assessed to determine the risk associated with the applicant. One of the primary factors is the age of the applicant, as it often correlates with health risks and life expectancy. Additionally, the financial history provides insight into the applicant's stability and ability to pay premiums, as well as potential indications of risk related to claims. The personal hobbies of the applicant also play a significant role in underwriting, especially in certain types of insurance, such as life or health insurance. Hobbies that are considered risky can elevate the likelihood of insurance claims. On the other hand, the educational background of the applicant is generally not a primary consideration in the underwriting process. While education may indirectly relate to an applicant's financial stability or lifestyle choices, it does not directly impact the risk assessment in the same way that age, financial history, and personal hobbies do. Underwriters focus more on tangible risk factors that can affect the likelihood of a claim, making educational background less relevant in this context.