Upon retirement, the money that the employer has contributed, plus investment earnings, is often used to purchase an annuity which will provide a regular pension benefit. See also home service distribution system. In group creditor insurance, a premium-paying arrangement for contributory plans whereby, every month, the lender adds to the outstanding balance of the loan an amount sufficient to insure that balance for one month. Contrast with single-premium method. The danger that a proposed insured might deliberately attempt to conceal or misrepresent information.
Moral hazard is a risk factor that affects the underwriting decision.
Sickness, disability, or failure of health. The likelihood that a person of a given age will suffer an illness or disability. The premium that a person pays for health insurance is based in part on the morbidity rate for that person's age group. A chart that shows the rates of sickness and injury occurring among given groups of people categorized by age. Back mortality charge The cost of the insurance protection element of a universal life policy.