What risks do underwriters look for when approving an application?

Before you ask that question you need to understand underwriting.

Underwriting is the process of examination of all the information you provide (i.e., applications, health information, possible financial info, occupation, driving record, hobbies) to obtain health insurance. They look at all the information to see if you have any clear, and not so clear risks. Life insurance companies know that there are always risks, but they want to make sure the risks are stacked in their favor.

Even if you have risks, you may still be insured; however, your premiums may be higher.

Main risks underwriters are on the lookout for:

  • Health – This is probably the first thing they look at. Obviously, if you have health risks, such as heart disease, cancer, and diabetes, the underwriter is going to take a good hard look at your situation. They will also look at your family medical history and any medication and the dosages.
    A para-exam may be requested by your underwriter. This exam could involve a blood and urine test, along with blood pressure checks and other tests. Depending on the results, either good or bad, they could have an effect on how the insurance company “rates” you and will be reflected, good or bad, on your premiums. All this doesn’t mean you are uninsurable, but you may have to pay higher premiums.
  • Age – Again, this seems pretty apparent. If you are younger, the risks aren’t as great; however, if you have a health complication at a younger age it will affect your rating. For instance, the insurance company will look at you differently if you are in your early 20s and healthy as opposed to if you are in your early 20s and have a heart problem or diabetes.
    Some insurance companies will price your premiums based on your “nearest” age. Suppose you are going to be having a birthday within 30-60 days. They will count the upcoming age on your application rather than your actual age at the time of your application.
  • Occupation –They’ll also look at the length of time you’ve been at your current job and your job history. Another consideration is whether you have a job that puts your life in danger? Perhaps you’re in law enforcement or you’re a professional athlete, like a race car driver.
  • Behaviors – Are you a smoker? Are you overweight? Do you enjoy sky diving or mountain climbing? If so, any of these will throw up a red flag to the underwriters.
  • Credit Score –Believe it or not, if you have bad credit, insurance companies consider you as a high risk, which they feel is typically associated with accident-prone behavior.

The big take-away here is that insurance underwriters will look at the big picture, not just one area.

No matter your life style, when you are completing an application or talking with a life insurance agent, be honest. The best way to ensure the right policy for you is to be clear and to talk with a reputable insurance agent like Ron L. Reed. At Ron L. Reed and Associates, our mission is simple, “To be Clear, Concise and Conversational with our potential and current clients. Our values are People Respect, Opportunity, Passion, Excellence and Loyalty.”  Give us a call or get an instant life insurance quote by filling out the form to the right.