The Underwriting Process—What It Is and What to Expect

Life insurance is there to help protect your loved ones when you die. The unknown factor—for everyone—is when it will happen. However, your age and health are two factors that can affect when the unfortunate might happen to you.

When you apply for a typical life insurance policy, both term and permanent, the insurance company will want to know about your health in order to determine whether they will issue a policy and at what price (called the premium).

If you’re young and healthy, your life expectancy is generally longer; therefore, your premiums can be less expensive. That’s why you hear so many people say, “Get coverage in place while you’re young and healthy!”

As you age, or begin to have various health issues, it may cost more to get covered. The underwriters at the insurance company factor these risks into consideration when you apply for coverage. At its most basic level, this is what is considered the underwriting process

What to Expect

For the underwriting process with a typical life insurance policy, your insurance agent will obtain some basic information on the application, including your age. Then, the insurance company may need to set up health screening. This can take place at your convenience, at home or work, depending on what you choose.

If a health screen is necessary, a certified medical professional will ask you a series of questions about your medical background, such as doctors you currently see and any medication you’re taking, as well as your health history and your lifestyle.

The examiner typically measures your height and weight, takes your blood pressure a blood sample, and a urine sample. The samples are sent to a lab. Then, the lab results, along with the questions you answered, will be analyzed by the underwriters at the insurance company to determine your rate class. Your rate class determines how much your insurance will cost.

Other Factors That May Matter

While age and health are important factors that underwriters will consider, there are others they may take into consideration, some of these items include:

• Prescription history

• Financial Information

• Driving history

• Nicotine/drug use

• Extreme sports i.e. car racing, sky diving

Simplified Underwriting

This may seem like a complicated process, but it helps ensure that you get your coverage at the best possible price. There are some people, however, who don’t want to wait for coverage or simply don’t want to go through a longer underwriting process.

Some insurance companies offer what’s called simplified underwriting for policies. This means you answer a few questions—age, gender and typical health questions—and, if approved, you can often get coverage right away. Remember, most life insurance policies that are issued with simplified underwriting have a cap on the coverage amount you can get; for example, $500,000.

The easiest thing to do is to talk to an agent about all this. Remember, they’ll sit down with you at no cost and walk you through your options.