If a proposed insured has lower than average life expectancy, what is the likely outcome from the insurer?

When a proposed insured has a lower than average life expectancy, it indicates to the insurer that there may be an increased risk associated with providing coverage to that individual. Insurers assess risk based on various factors, including health history and lifestyle choices. If a person is determined to have a higher risk of claiming on their policy due to their health status, the insurer will typically respond by charging a higher premium.

This increase in premium is a means of balancing the risk the insurer is taking on. The higher-than-standard premium rate compensates for the anticipated higher costs that may result from more frequent claims or claims of larger amounts. Therefore, this adjustment in premium reflects the insurance principle of risk-based pricing, where the cost of insurance is aligned with the risk involved.

In summary, when an insurer evaluates a proposed insured with lower than average life expectancy, offering a higher-than-standard premium rate is a standard response that aligns with assessing and managing risk effectively.