Certified Financial Consultant (CFC) 2025 – 400 Free Practice Questions to Pass the Exam

When an applicant has an existing condition, it typically leads to a more thorough evaluation of their health status by life insurance underwriters. Due to the increased risk associated with pre-existing medical conditions, insurers often respond by adjusting the terms of coverage. Offering a higher premium is common as it reflects the additional risk the insurer is taking on. This adjustment ensures that the insurance company can compensate for the likelihood of a claim being made due to the applicant's health condition.

In contrast, not affecting eligibility at all is generally unrealistic in the context of existing health issues, as insurers assess risk carefully to protect their financial interests. Automatic denials may occur in certain high-risk situations but are not universally applied to all applicants with conditions. Additionally, offering a refund on premiums would be incompatible with standard policy practices, as premiums are charged based on risk assessment and coverage terms agreed upon at the start of the policy. Therefore, adjusting the premium to account for existing conditions accurately reflects industry norms.