Insurance Underwriting

Underwriting is essentially the process of evaluating the degree of risk a person presents in order for the insurance company to decide whether to accept or reject a life insurance application.  In other words, if the insurer were to issue you a life insurance policy, it wants to know what chances you would die and your beneficiary(s) collect the death benefit?  

All insurance policies require some level of underwriting. The level of underwriting depends on the size of insurance cover you seek - higher the amount, more underwriting is required. The process of underwriting begins when you submit your application. To assess your risk, a life insurer relies on information from a range of sources. As a minimum you will be asked to complete an application form and a medical questionnaire. Apart from these, life insurance companies want to know about your family’s medical history (to check if one suffers a hereditary disease), occupation, hobbies, smoking & drinking habits, etc. In general, the younger and healthier you are, the lower is the premium; the more dangerous the work you do, the higher is your premium.

The insurance principle (“utmost good faith”) demands that the applicant must fully and truthfully declare his health conditions even the insurer may not have asked you to do so. 

People with similar risk are offered similar premium rates. People with medical conditions may have to pay higher premium. In some serious cases, the insurer may decline to cover. 

Underwriting helps ensure everyone pays a fair premium and that the insurer does not take on excessive risk.

If you have any question, please send it to info@prudential.la