As an applicant for insurance, risk appraisal helps the company determine the appropriate cost to cover your risk profile—your "fair share." It prevents you from having to pay the same as someone with a less favorable risk profile. Risk appraisal is necessary to allow the company to offer coverage at an affordable price, and in some cases, to offer coverage at all.

Without risk appraisal, everyone would pay the same price. Even if you would be considered a "good risk," you would end up paying more than the appropriate amount for your risk level. Why? Because you and every other policyowner would have to absorb the extra risk and costs associated with those who have less favorable risk profiles. These extra costs would drive up the cost of insurance for everyone.

Risk appraisal is especially important to you because it protects the value of your insurance. It ensures that:

• We will only issue appropriate amounts of insurance, at the appropriate price, to people who fall within established guidelines.

• Our risk appraisal guidelines and goals remain consistent over time.

• Northwestern Mutual offers insurance only to people who can benefit the existing customers as a group. We do not issue policies that may compromise the value of our customers' insurance and the financial stability of the company.

A thorough risk appraisal process helps you in several ways:

• Lower Cost—You are often able to purchase a policy as a member of the most favorable risk group, which means the best price—you pay only your fair share.



• Locked—in Risk Classification - Once the risk classification has been determined for your policy, it cannot be changed due to deterioration in your health.



• Quality Coverage—A thorough risk appraisal process is a hallmark of a strong company. You can be confident you are receiving the finest-quality coverage for your money.



• Non-Cancelable Coverage—Once a policy is issued, the company cannot cancel it due to a deterioration of your health. By participating in the risk appraisal process, and supplying accurate information, you can secure insurance coverage that can be with you for the rest of your life.



• Early Warning—The risk appraisal process might alert you to potential or existing health problems that you otherwise may not have known about.