Numerical Rating System

Numerical Rating System

In insurance underwriting, a system that assigns numbered weights to various risk factors. For example, in health insurance, a smoker will be assigned a different numerical rating than a non-smoker to compensate for the smoker's higher risk. A numerical rating system compiles numbers for all risk factors to arrive at an aggregate score. Underwriters may use this to see if one is insurable and, if so, what premium one must pay.