Life insurance underwriting is complicated, but it doesn’t have to be with RiskQuoter. We teach you everything you need to know.
Underwriting Quick Overview
Follow these links to the sections that interest you:
- Life Insurance Underwriting Process
- Medical History
- Family Medical History
- Occupation and Income
- Underwriting FAQ
- Underwriting Decisions
Life Insurance Underwriting Process
Life insurance underwriting is the evaluation of your medical history, personal background, height, and weight history, and other factors to determine your eligibility (and price) for life insurance.
The following factors are used in the life insurance underwriting process to determine your underwriting outcome and life insurance price.
Life insurance companies need to know how your current health is.
Life insurers will review your medical records, prescription databases, and the results of the life insurance paramedical exam if it is required.
As part of life insurance underwriting, companies need to know about any medical conditions you’ve had.
The following is a great article about high-risk health issues that are especially important to underwriters when reviewing your medical history.
In the above article, we detail many health conditions, including:
- Cancer History
- Diabetes and Endocrine Disorders
- Heart Conditions
- HIV Positive
- Mental Health
- Prostate Disorders
- Brain Disorders
- Other Medical
We can help even if you’ve been denied life insurance due to health issues.
If your policy has an additional expense called a table rating or flat extra, let us know as there may be better offers out there.
Family Medical History
Did you know that your parents’ and siblings’ medical history may affect your life insurance rates?
It’s true, but the following guide will help you find the best company based on your individual circumstances.
The above article details how life insurers look at your parents’ and siblings’ medical history of cancer, heart disease, and diabetes.
It then tells you which life insurance companies are best, and what to expect in terms of price.
While most occupations do not present a problem with underwriting, there are some jobs that may require an additional expense called a flat-extra.
Some examples might include commercial divers, professional athletes, marijuana workers, miners, etc. Most occupations are insurable, it just becomes a matter of price.
Keep in mind that some insurance companies are better than others with certain occupations, but we’ll make sure you get to the right company.
Income and Financials
With financial underwriting, life insurance carriers want to make sure the amount of coverage you seek is justifiable.
Underwriters may ask about:
- Annual Income
- Household Income
- Unearned Income
- Net worth
- Credit History
For unique situations when you are seeking more life insurance than would typically be expected, a good cover letter will address any financial concerns that the underwriter has.
An example of this might life insurance in divorce settlements if the amount of coverage sought seems excessive on the surface.
Annual Income – Companies will ask what your annual income is. In most cases, they do not ask for additional information such as does your income consist of salary, commissions, etc.
Household Income – Some companies ask what the total income is for your house if your spouse also works.
Unearned Income – If you have unearned income from investments, life insurers want an estimate of what you make from those investments.
Credit History – Your credit history is considered as part of financial underwriting. Bankruptcy is the most common issue we see. Some companies will make you wait until discharge, while others may consider now depending on the circumstances.
Life insurance companies want to know if you participate in any of the following activities as you may end up paying more for coverage.
Do you participate in adventure sports activities like scuba diving, rock or mountain climbing, skydiving, motorized racing, etc?
If you’re a private pilot, special underwriting rules apply. Some companies will allow an aviation exclusion rider. Commercial airline pilots are not affected unless they also participate in private aviation.
Do you travel internationally?
Countries on the U.S. State Department travel warnings site may result in additional premiums or postponement of life insurance until you return from your trip.
Life insurers use a points system to determine if your motor vehicle record will negatively affect you.
Single violations such as a speeding ticket is usually a non-factor with underwriting. Life insurers become concerned when they see multiple violations within a 2-3 year period of time, which may result in higher premiums.
Reckless driving and DUI’s typically follow criminal underwriting rules.
The most common history we see in life insurance underwriting is drunk driving arrests. Most rates are based on the time since your DUI arrest and court outcome.
For other criminal histories, the availability of life insurance depends on individual crimes, convictions, and your current probation/parole status.
The following are the most common life insurance underwriting questions we receive.
Underwriting may take from several days to a few months to complete. It all depends on the type of policy, insurance company chosen, your medical history and more.
Each life insurer has its own set of general life underwriting guidelines that are used to determine your eligibility and price for life insurance.
Fully underwritten life insurance requires the most comprehensive underwriting review when compared to other types of underwriting mentioned later.
No medical life insurance is a great option if you are in good health, like convenience, do not like paramed exams, and you are in a hurry to complete your life insurance.
With guaranteed issue life insurance, few if any questions are asked. The main reason why any health questions are asked is to determine if you will receive a level or graded death benefit.
After your file has been reviewed, the underwriter determines if you are eligible for life insurance, and what rate they will charge you.
Approved As Applied – You received the underwriting rate you were expecting.
Approved Other Than As You Applied (AOTA) – You may receive approval at a more or less favorable rate class than expected.
Postponed – If you were just diagnosed or recently completed treatment for a health issue, some carriers may postpone offering life insurance to you for a period of time.
Denied – You may be denied by the life insurance company. When this happens, we’ll discuss the next steps.
Are life insurance offers negotiable?
Yes and No. If there is a health issue involved and you received a table rated offer, there may be times when we can get the company to reduce or eliminate the rating, especially if you have other positive factors that we can point out to underwriting.
Will you qualify for preferred best rates?
Keep in mind that 20% of all applicants qualify for the preferred best life insurance rates. If you meet the criteria, you’ll get the rate.
Will my upcoming birthday affect my rate?
While most life insurers consider you to be the next age once you are within 6 months of your next birthday, companies do allow you to “backdate” your policy for the younger age.
Do medications affect life insurance rates?
It depends on the medication and the control of the medical condition. Many companies still allow their best rates if you take blood pressure or cholesterol medication.
Life insurance is available for many health conditions and non-medical issues. The best way to get started is to submit your quote request today.
When we receive your request, we’ll provide you with accurate quotes from the best companies available, and there is never any pressure or obligation with our service. Thank you.