Simple English definitions for legal terms
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Classified risk refers to the possibility of harm or loss that is categorized based on specific factors such as a person's health or other perils. It is a type of risk that is considered by insurance companies when determining coverage and premiums. For example, someone with a history of health issues may be classified as a higher risk for health insurance. Insurance companies may also consider non-insurable risks, which are risks that are too uncertain to be covered by insurance.
Definition: Classified risk refers to the risk associated with a policyholder's substandard health or other peril in life and health insurance policies.
Examples:
These examples illustrate how a policyholder's health or occupation can increase the likelihood of a claim being made on an insurance policy, which in turn increases the risk for the insurer.