What is a common term used for accounting for risk in life insurance?

In the context of life insurance, the common term for accounting for risk is underwriting. Underwriting is the process through which an insurance company evaluates the risk of insuring an individual. This involves assessing various factors such as the applicant's health, lifestyle, occupation, and family medical history to determine the level of risk they pose to the insurer.

During underwriting, the insurer decides whether to accept the application, how much coverage to offer, and at what premium rate. This process is crucial because it ensures that the insurance company maintains a balanced portfolio of insured individuals, which ultimately supports its financial stability.

In contrast, statistical probability, risk assessment, and risk premium are related concepts but do not encompass the entirety of risk management within life insurance as effectively as underwriting does. Statistical probability refers to the likelihood of a given event occurring, risk assessment is the broader process of identifying and analyzing potential risks, and risk premium is the additional charge that an insurer includes in the premium to cover the risk of potential loss. While these concepts play important roles in the insurance industry, underwriting specifically represents the systematic evaluation of these factors to make informed decisions about life insurance coverage.