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During the underwriting process, insurers assess your risk level to determine whether you’re eligible for coverage — and how much you’ll pay in premiums. The higher the risk, the higher the premiums. This is similar to how a car insurance company will ask you if you have had any previous license suspensions or accidents to analyze your driving behavior and determine your rates.
To get the best possible coverage, it’s worth learning how underwriting works.
Underwriting is the process of evaluating the degree of risk an applicant presents to the insurance company. Every insurer using its own complex underwriting guidelines to determine whether they should accept or reject an application, and to calculate rates.
With most policies, you’ll have to complete a life insurance application, which asks about your medical and family health history, hobbies, occupation and driving record. This questionnaire is designed to give the insurer an idea of your risk profile and the lifestyle you lead.
If the insurer feels the application wasn’t filled out thoroughly, you’ll likely receive a call to fill in the blanks in order to move on to the next step of getting a life insurance policy — underwriting. This may involve taking a medical exam.Your insurer will assign an underwriter to your case, who will then assess all the information you’ve provided, as well as the results of your medical exam, if applicable.
As part of your application, the insurer will require you to submit these details:
You may be asked to provide supporting documentation, such as:
Depending on the policy you’ve chosen, you may need to take a medical exam. It’s a basic physical whereby a medical professional will record your height and weight, and request a blood and urine sample.
They’ll also ask you questions about your health and family history. These conditions pose a higher risk to the insurer, and may lead to an increase in rates:
The underwriting process can determine:
Life insurance is based on calculable risk, so your insurer will look a range of factors when assessing your application. These include:
No. If you don’t want to take the medical exam for whatever reason, you can apply for a policy with simplified underwriting. These are the two main options:
It comes down to the insurer’s financials. If the underwriters don’t do a good job and quote high premiums, the insurer stands to lose out on a lot of business to their competitors. Similarly, if the underwriters don’t calculate a person’s risk correctly and quote lower premiums, the insurer may lose money by covering high-risk individuals at lower rates.
Life insurance underwriting is the process that determines how risky you are in the eyes of your insurer. It has a direct effect on your premiums — young, healthy people typically get the best rates because their risk is lowest. But even if you have a history of health conditions or risky behavior, you could still find a life insurance policy to fit your needs.
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What are the financial information required in medical life underwriting?
Hello Erick,
Thank you for your comment.
Please note that medical underwriting and financial underwriting are two different types of underwriting in life insurance.
Medical underwriting is the process of assessing your medical history. So if you disclosed that you had a history of high blood pressure, the underwriter at the insurance company might request a report from your doctor. Requesting information from your doctor or any relevant medical professional will be done with your permission. All medical information gathered is strictly confidential and is only viewed by those who have a direct role in assessing your application.
Financial underwriting is to make sure that the cover amount which you apply for is appropriate for your financial situation. This is to make sure that you don’t over-insure yourself and this will keep your premiums down. This is also completely confidential.
Therefore, the information needed for medical underwriting is your medical history and not your financial information. You may refer to the details above to determine how underwriting works and use it as a guide. I hope this helps.
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Regards,
Jhezelyn