Insurance Underwriting

In order to comprehend how insurance underwriting works, you need to understand the definition of underwriting. Underwriting is the procedure when a bank or other large financial institution insures someone. Since insurance underwriting happens with all types of insurance policies it is really important to understand the steps involved and what to expect when you are dealing with an insurance underwriter.

The insurance underwriting process starts with completing a insurance quote and getting your insurance policy. Depending on the complexity of your insurance policy, you may have to meet with an underwriter so that he or she can ask you more personal questions to get a better idea of the scope and accurately assign a rate for your insurance policy. It’s important to know that these meetings or conversation are strictly confidential. Since every insurance company has there own insurance underwriting guidelines you need to find out the criteria being used to underwrite your insurance policy. Also be sure to explore any opportunities to combine coverages with other policies. Life insurance underwriting has become a very profitable business unit for many insurance companies.

Life insurance underwriting

As with any insurance policy there are certain criteria that determine the rate a person will be charged or the possibility that person maybe uninsurable. The process involved in life insurance underwriting is a little more complex than other types of insurance. Every insurance company has there own criteria when they are underwriting a policy. It is important to understand that since a life insurance policy pays out money upon that person’s death. Physical characteristics like height and weight are taken into consideration, as well as age, occupation, income and hobbies.

After the life insurance underwriting policy has been completed, the underwriter will assess which of the four classifications of risk you fit into for your policy. The 4 categories of risk are proffered, standard, rated and uninsurable. Proffered provides the least expensive premium and then it becomes more costly down the list until with the declined being the applicant is uninsurable. For example a 33-year-old male executive, in good health, non-smoking, average income and no high risk hobbies would be rated at a lower death risk. In comparison to a 33-year- old over weight, heavy smoker that is involved in extreme sports would be rated at a very high risk rate and possible be deemed uninsurable.

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