In regards to life insurance, what does "insurability" refer to?

Insurability refers to the applicant's health status and related factors that impact eligibility for a life insurance policy. When an individual applies for life insurance, the insurer evaluates various aspects of the applicant’s health, occupation, lifestyle, and family medical history to determine the risk associated with providing coverage. This assessment influences whether the applicant can be accepted for a policy and at what premium rate.

Health-related factors play a crucial role in this process because they can significantly affect the likelihood of the insured living to the end of the policy term. Therefore, understanding an applicant’s health allows insurance companies to manage risk and ensure they can meet their obligations under the policies they issue.

In contrast, the other options focus on different aspects of life insurance that do not relate directly to the concept of insurability. Financial stability of the insurer is important, but it pertains to the company's operational health rather than the individual's eligibility for coverage. The right for policyholders to change beneficiaries relates to policy administration and not to the application process for obtaining coverage. Lastly, while the expected lifespan of the insured is a consideration, it is a downstream effect of the assessment of insurability rather than the definition itself.