What is life insurance underwriting and how does it work

A: Underwriting is a process that every applicant who applies for insurance coverage needs to go through. It helps determine whether an applicant is insurable — and at what amount and at what cost to the applicant. It's designed to provide the fairest price for a person's risk profile.

How does a life insurance underwriter work?

Life insurance underwriting is a process where insurance carriers assign applicants a classification based on several factors. Underwriters consider several rate factors — such as your age, gender and medical history — to evaluate risk.

How does insurance underwriting work?

Underwriting is the process of assessing the amount of risk you present to a potential insurer. Professional underwriters review the criteria on your application to see if it's possible to offer you a policy and, if so, how much coverage you're eligible for. Then, they set your monthly premium based on the information.

What is the most important factor in underwriting life insurance?

The process of underwriting involves four basic functions: 1) selection of risks, 2) classification and rating, 3) policy forms, and 4) retention and reinsurance. By performing these four functions the underwriter increases the possibility of securing a safe and profitable distribution of risks.