What factor likely led to a 25% higher premium for one of two identical twin applicants buying the same life insurance policy?

The reason for a 25% higher premium for one of the identical twin applicants, despite their similarity, typically relates to risk classification. Insurance companies use risk classification to assess the likelihood of an insured person filing a claim based on various factors such as health, lifestyle, and occupation. While the twins may share many characteristics, subtle differences in risk factors can lead to significant variances in premiums.

For instance, if one twin has a medical condition or engages in riskier behaviors (like smoking or engaging in hazardous hobbies), even if these distinctions aren't immediately apparent, they will greatly influence the insurer’s assessment of risk. Consequently, this twin may be classified as a higher risk, justifying the increase in their premium compared to their identical sibling.

Also, the other options, such as health status, might seem like a plausible reason for differing premiums, but these would contribute to the broader category of risk classification. Similarly, age and occupation could lead to premium variations, but in this scenario, the twins are likely perceived through the lens of their overall risk classification, which encompasses multiple elements influencing premium costs.