Underwriting is how the insurer evaluates risk.
Submitting a life insurance application does not automatically mean the policy is approved. The insurance company reviews information relevant to its underwriting guidelines before deciding whether to offer coverage and on what terms.
The exact process varies by insurer, policy type, coverage amount, age, health history and other factors. Some applications can be evaluated using electronic data and application answers, while others may require additional records, an interview or a medical examination.
Underwriting criteria and outcomes are determined by the issuing insurer. No particular approval, rate class or processing time is guaranteed.
What information may be reviewed?
Insurers use underwriting information to evaluate mortality risk. The information requested depends on the company and product, but the review may include several categories.
What does the underwriting process look like?
The steps and order can vary. Some applications may not require every step shown above.
Will I need a medical exam?
Not necessarily. Some life insurance applications can be underwritten without a traditional medical exam. Depending on the insurer and product, the company may use application answers and other authorized data sources to evaluate eligibility.
Other applications may require measurements, laboratory testing, medical records or additional evidence. A “no-exam” process does not necessarily mean there is no underwriting or that approval is guaranteed.
Why might the insurer ask for medical records?
If an application or available data identifies information that needs clarification, the insurer may request records from a healthcare provider, subject to applicable authorization and privacy requirements. Records can help an underwriter understand diagnoses, treatment, test results, follow-up and current status.
A request for additional information does not by itself mean an application will be declined. It means the insurer needs more information to complete its evaluation.
What are the possible underwriting outcomes?
How long does underwriting take?
There is no universal processing time. Some applications may receive decisions quickly when the insurer can evaluate them electronically. Others can take longer if medical records, examinations, additional forms or clarification are required.
Timing can also depend on how quickly requested information is completed and returned. A longer review does not necessarily indicate a particular underwriting outcome.
What can help avoid unnecessary delays?
- Answer application questions completely and accurately.
- Have medication names and relevant physician information available if requested.
- Respond promptly when the insurer or agent requests additional information.
- Complete any required interview, examination or authorization in a timely manner.
- Review the application for errors before it is submitted.
- Tell your agent if important information changes while the application is pending.
Questions worth asking before you apply
- Does this product typically require full underwriting, accelerated underwriting or another process?
- Could a medical exam or medical records be required?
- What information should I have available before completing the application?
- Is the premium I am seeing an illustration or an actually approved rate?
- What happens if I qualify for a different rate class?
- How will I know if the insurer needs additional information?
- When does coverage actually become effective under the policy and application terms?
The bottom line
Underwriting is the insurer's process for deciding whether it can offer life insurance coverage and on what terms. The amount of information required can range from a relatively streamlined electronic review to a more detailed evaluation involving medical or other records.
Providing accurate information and understanding that an initial quote is not necessarily a final approved premium can make the process easier to navigate.