Preferred Risk

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August 25, 2024 3 min read Definitions

Preferred Risk: Lower Expectation of Incurring a Loss

Insurance Finance Preferred Risk Insurance Premiums Risk Assessment Underwriting

In the insurance industry, a preferred risk refers to an insured or an applicant with a lower expectation of incurring a loss compared to the standard applicant. This often results in reduced premium rates, such as non-smokers in life insurance due to longer life expectancy.