Insurance policies can be complex and some policyholders may not understand all the fees and coverages included in a policy. As a result, people may buy policies on unfavorable terms. In response to these issues, copious countries have enacted copious statutory and regulatory regimes governing every aspect of the insurance business, including minimum standards for policies and the ways in which they may be advertised and sold.

An safeguard underwriter's job is to evaluate a given risk as to the likelihood that a debt will occur. Any agency that causes a greater likelihood of casualty should theoretically be charged a higher rate. This inherent principle of health plan must be followed if warranty companies are to remain solvent. Thus, "discrimination" against (i.e., differential treatment of) potential insureds in the risk evaluation and premium-setting modus operandi is a necessary by-product of the fundamentals of safeguard underwriting. For instance, insurers rush older people significantly tertiary school premiums than they sortie younger people for course life insurance. Older people are thus treated differently than younger people (i.e., a distinction is made, discrimination occurs). The rationale for the Hole In One Insurance differential treatment goes to the heart of the risk a life insurer takes: Gray people are likely to die sooner than blooming people, so the risk of loss (the insured's death) is greater in any given period of hour and therefore the risk plum must be higher to cover the greater risk. However, treating insureds differently when there is no actuarially sound reason for doing so is unlawful discrimination.