Sep
23
2008
What happens during the life insurance underwriting process?
Author: Byron UdellSo, you’ve completed a term life insurance application and medical exam. Now what? This is where the life insurance company will begin to underwrite your case. It’s simply an evaluation of your case.
What’s involved? An “underwriter” will review the answers you provided on your application and the results of your medical exam in order to determine what kind of “risk” you pose to them. Once all required information has been received, the insurance company will make a decision regarding whether, and at what life insurance rate, you qualify for.
Underwriting attempts to classify risks based upon the likelihood of death in order to charge people accordingly to the potential risk. This not only protects the life insurer, but also those that are least likely to die get the most affordable life insurance rate. It only makes sense that a person with a past history of a serious illness is going to be charged a much higher premium than the healthy person. If you were the healthy person with the least likelihood to die would you want to pay the same amount as the person who had a serious illness? I know I wouldn’t.
September 24th, 2008 at 7:18 am
The underwriting process provides a way for the insurance company to properly evaluate you as a risk…meaning what is the chance you will die during the term of your life insurance policy.
Many factors go in to evaluating you as a risk to the insurance company.
Among the underwriting factors for life insurance are: your age, gender, health, health history, your family health history, the type of policy you choose, the amount of coverage, the length of your policy term, your occupation, your hobbies, etc.
Make sure you answer all questions truthfully when applying for life insurance to get the best rate based on your personal situation.