Page 6 - Life Assurance

imum medical and other selection standards
on which mortality tables are based. Other
factors, such as occupation and credit
standing, also enter into the meaning of
insurability.

Some applications for life insurance are
rejected because of un-insurability. Other
applications are accepted at an extra premium for
unusual risk. The probability of un-insurability is high
enough that the right of renewal without medical
examination is an important feature. In the case of
most insurers, however, this right expires at age 60
or 65 years.

- Decreasing-Term Contract:

When the amount of pure death protection
gradually declines each year on a term contract,
the policy is described as one of decreasing
term. The premium payable may be constant
over the term but the insurance protection
decreases.

A good example of the use of decreasing
term insurance is in credit life insurance and in
mortgage protection insurance.

As an insured repays an obligation such as
a mortgage debit, the amount of coverage
decreases steadily, corresponding to the
declining balance of the debt. In this way the

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