Eligibility Requirements
What Does Eligibility Requirements Mean?
Eligibility requirements, in the context of insurance, are the criteria an individual must meet to qualify for an insurance policy. Insurance companies use these requirements to screen out high-risk individuals. Different types of insurance have varying eligibility requirements.
Insuranceopedia Explains Eligibility Requirements
Insurance companies establish eligibility requirements because their policies are designed to cover specific types of losses and particular groups of individuals. For example, only family members qualify for a family health insurance plan; neighbors or friends would not be eligible.
In the case of life insurance, companies assess various factors to determine an individual’s eligibility for a policy. These factors may include age, height, weight, occupation, and tobacco and alcohol use. Individuals who meet the specific criteria for a policy may purchase one, as not everyone poses a low enough risk for approval.
