LIFE INSURANCE UNDERWRITING GUIDE

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Questions...
1. What is underwriting?
2. What underwriting factors are important for life insurance?
3. Which are the next most important factors?
4. I just won an age-group medal in a 10K race, but my application for life insurance was not given the most preferred rating. How can that be?
5. My agent said it was cholesterol ratio. What is that?
6. So, how much does that raise my premium?
7. Do all companies treat these factor alike?
8. Can you give an example?
Answers...
1. Underwriting is the process of determining the financial risk associated with issuing a policy. For life insurance, this means determining which of several predefined categories fit your profile.
2. Smoking is the most important factor, doubling or even tripling your premiums. All insurance companies have separate categories for smokers.
3. Most actuaries consider these to be the most important factors after smoking: cholesterol, blood pressure, build (height and weight), family history of cancer or heart disease, and driving record.
4. The reason may not be health related. Ask your agent if it is due to your driving record, hazardous occupation or hobbies, plans for foreign travel, or some other reason.
5. Cholesterol ratio is considered by most companies to be as important as total cholesterol. Cholesterol ratio is the ratio of total cholesterol to cholesterol bound to high density lipoproteins (HDL or "good" cholesterol). Perhaps you don't have enough HDL, which is required for important body functions.
6. In our study, the average increase due to poor underwriting factors was anywhere from $129 to $626 per year.
7. No, there is wide variation in the treatment from one company to the next.
8. In our study, our sample person, with a total cholesterol of 285 mg/dl, would have paid $730 with one company and $1,315 with another. This is why it is so important to choose the right company with which to apply for life insurance.
If you need help with your underwriting factors, please don't hesitate to ask us!


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