You fill in the application, sign, and then... wait. For some people that waiting is the most anxious part of buying insurance.
It helps to know what's happening on the other side.
What underwriting is
Underwriting is the insurer's process of deciding whether to accept your application, and on what terms. Their question is: how much risk is this person likely to bring, and what's the fair price for it?
It isn't a judgment of you. It's a pricing exercise.
What they look at
Typically, some mix of:
- Your application answers: age, occupation, lifestyle, smoking, and your health history.
- Medical information: sometimes a questionnaire is enough. Sometimes a medical exam, blood or urine tests, or records from your doctor are requested, particularly for larger amounts or older applicants.
- Financial justification: for large sums, the insurer may want to understand why the amount fits your income and situation.
- Other insurance and history: previous applications or claims, in some cases.
What's asked varies by company and by the size of the cover.
The possible outcomes
1. Approved as applied. Standard terms and premium. 2. Approved with an extra premium (sometimes called a loading) if the risk is higher than standard. 3. Approved with an exclusion, meaning a particular condition is carved out. 4. Postponed, to be reconsidered after a period, or after a treatment. 5. Declined. It happens, and there are things you can do afterwards.
None of these is a verdict on your worth. If you get anything other than standard terms, ask for the reason in writing and what would change it.
The one rule
Answer honestly and completely. This is the point of the whole system. The insurer relies on your answers to price the policy. If something is left out, even innocently, it can cause trouble when you claim. A modest extra premium or an exclusion you know about is far better than a claim that's contested later.
If you're unsure whether something is relevant, say it. Let the underwriter decide.
Practical tips
- Gather your information first: names of medications, dates of diagnoses, doctors you've seen.
- Don't guess. If you don't remember, say you're not sure and offer to provide records.
- Keep a copy of your application, so you know what you declared.
- Read the approval terms. If an extra premium or exclusion is attached, make sure you understand it before you accept.
What to do while you wait
Nothing dramatic. Underwriting can take days or weeks depending on what's needed. Don't cancel any existing cover until the new policy is confirmed and in force. That one point matters more than anything else on this list.
The free Life Ready Checklist at lifereadywithvenus.com has a page for writing these down, free and with no sign-up.
