Which applicant could an insurer charge a higher rate without being accused of unfair discrimination?

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An insurer can charge a higher rate to an applicant who smokes cigarettes because tobacco use is a significant risk factor associated with various health issues and increased mortality. Insurers assess risk based on the likelihood of claims being made, and smoking is linked to higher medical costs and shorter life expectancy. This makes it justifiable for insurers to adjust premiums accordingly to reflect the higher risk presented by tobacco users.

In contrast, the other options involve factors that are often considered discriminatory if used in underwriting practices. For instance, being born in another country, being legally blind, or having a history of domestic abuse do not directly correlate with the actuarial risk in the same manner as smoking. Laws typically prevent insurers from charging higher rates based on nationality, disabilities, or personal history that are beyond an individual's control, as this would constitute unfair discrimination. Therefore, charging a higher rate based on smoking is both ethical and legal within the insurance industry, making it a valid practice.

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