Individual Underwriting by the Insurer

Question 1

Underwriting process

Answer 1

Underwriting is the process of selection, classification, and rating: determining if someone is insurable, classifying the risk, and determining the rate or premium to be charged.

Question 2

The Application consists of two parts:

Answer 2

Part I contains general questions about the applicant, such as sex/gender, marital status, residence, date of birth, occupation, and past and present life insurance

Part II contains questions pertaining to medical background, past and present health, any medical visits, hospitalizations, or surgeries in recent years, and the medical status of immediate family members, including their ages and causes of death.

Question 3

purpose of the Medical Information Bureau (MIB)

Answer 3

to collect adverse medical information about an applicant’s health, supported by insurance companies, and act as an information exchange.

Question 4

Inspection Report i

Answer 4

a general report of the applicant’s finances, character, morals, work, hobbies, and other habits. This is sometimes referred to as a Consumer Investigative Report. This can be completed by the insurer or a third-party provider. The applicant must be made aware of any information-gathering and has rights provided under the FCRA.

Question 5

Agent’s Report

Answer 5

a personal statement submitted by the producer, to the insurer, regarding the applicant’s financial condition, any personal knowledge of the applicant, etc. This information remains confidential between the producer and the insurer, and it does not become part of the entire contract.

Question 6

Nonmedical Application

Answer 6

An application used when a requested policy does not require a medical examination for underwriting. Health questions on the application are asked by the producer and are the only medical information required.

Question 7

Rating Applicants

Answer 7

Upon receipt of the information, such as the application, medical exam, blood and urine test results, underwriters analyze the information and determine if the applicant is an acceptable risk. If they are acceptable, underwriters then determine the classification to be used in the calculation of the premium.