What is underwriting?


As you go through the life insurance process, underwriters (individuals who work for an insurance company and are trained in evaluating risks) are doing the behind-the-scenes work to get you the best rates based on your risk profile.

Life insurance underwriting is the name given to the process of assessing your life insurance application. It takes stock of who you are and what your lifestyle is like. Once you apply, an underwriter for the insurance company will take a look at medical screenings, driving records and more. This is designed to evaluate risk and establish premiums appropriate for you. Through the underwriting process, insurance providers can more accurately price each policy, keeping prices lower for more families.

The life insurance underwriting process

While each insurance provider has its own underwriting process, here’s what you can expect from most major providers.

1. Quote

Before you even apply, you can get a free quote. All you need to do is answer a few short questions about yourself. It only takes a few minutes and can be done completely online. An accurate quote is an important step to see how much coverage you can afford.

2. Application

Once you’ve decided to apply, you’ll complete your life insurance application. You will likely need to provide some personal information, including employment, income and medical history. 

3. Medical history and health screening

Once you’ve decided to apply, you’ll complete your life insurance application. You will likely need to provide some personal information, including employment, income and medical history. 

Over the years, the application process has come a long way. What used to be a longer process now takes as little as 15 minutes to complete.

As soon as you apply for life insurance, an underwriter checks your application to ensure it’s complete. Some companies will also schedule a telephone call. You might be asked to share more about your coverage needs, as well your lifestyle and hobbies, all of which could impact your final life insurance rates.

4. Underwriter review

A professional underwriter will look at both your application and your medical exam results.

If the underwriter finds an irregularity from your exam, they may request additional information, including an Attending Physician Statement. Conducted by your doctor, the APS is a summary of your medical record and highlights current health conditions, the treatment you’re taking, symptoms you’re experiencing, as well as a health prognosis.

In addition to your exam results, underwriters will look at your family medical history, public reports, financial records, criminal history and more to get the clearest picture of your lifestyle.

5. Decision

The underwriter will weigh the information using a special rating formula, which will decide whether you’re approved for coverage and the prices you’ll pay. Once the policy is signed and paid for, the policy becomes active.

Did you know?

Certain medical conditions and lifestyle habits may increase the insurance company’s risk level of insuring you. While they likely won’t rule you out for coverage, they may lead to higher premiums. These conditions include:

  • Obesity
  • Diabetes
  • Preexisting conditions
  • Smoking
  • Excessive alcohol or drug use

In order to get an accurate estimation of your overall health, many life insurance companies require a medical exam. As simple as a regular checkup, this exam is free of charge for all applicants and involves basic measurements (e.g., height, weight, blood pressure), a blood test, and a drug test. Favorable lab results are typically reflected in lower premiums, so treat this health screening seriously.

These days, Legal & General America is allowing some applicants to skip exams with accelerated underwriting.

The future of insurance underwriting 

The underwriting process has evolved over time. Today, insurance providers like Legal & General America offer accelerated underwriting, which streamlines the life insurance and allows families to get the right insurance coverage faster.

 Accelerated underwriting allows some applicants to skip the medical exam, taking advantage of public records that can be pulled automatically. This allows applicants to be approved even faster.