What factor can life insurers use for discrimination when determining insurance rates?

Life insurers commonly utilize physical hazards, such as age and health, when determining insurance rates due to their direct correlation with the risk of mortality. Insurers assess these factors because they significantly impact the likelihood of claims being made. For instance, older individuals and those with pre-existing health conditions may be deemed higher risk, thereby leading to increased premiums to compensate for the greater probability of premature death or health-related claims.

This practice aligns with underwriting principles that aim to classify applicants based on observable and measurable factors that predict longevity and the likelihood of insurance payouts. Risk assessments based on these physical attributes help insurers ensure that they can maintain financial viability while providing coverage.

In contrast, other options such as employment status, criminal history, and annual income are less frequently used as primary factors for determining life insurance rates, as they do not directly relate to the individual's health or life expectancy in the same way that physical hazards do. While these factors may influence certain aspects of underwriting or be considered in other types of insurance, they do not carry the same weight in the life insurance context.