'Underwriting' is a process that financial companies use to assess your eligibility to receive their products.
- Insurance companies gauge the risk of providing the Insured cover and price its products their products accordingly.
- The first step by the Insurance company in underwriting process is that it asks the prospect (to be insured) to fill out a proposal form to know better about him / her.
Proposal form is a legal document that seeks relevant information from you. - If the prospect intentionally hide / suppress the information, the Insurance company is well within the rights to refuse a claim.
- The details like age, name, income, occupation, health etc. have different roles to play.
- Age determines the premium to be paid. Older persons will have to pay more premium.
- Income decides the level of insurance (sum assured) and affordability to remit premium on time.
- Apart from Life Insurance Underwriting, Medical underwriting is also a crucial part of an insurance company to assess the risk.
- The health insurance companies require complete health status to provide the prospect health cover.
- Health Insurance Companies seek declaration about the insured's health, medical history of family, pre-existing ailments, if any or instances of hospitalization in the recent past.
- Once the process of underwriting is over, the insurance company agrees to insure the applicant for insurance for a certain amount of sum at a certain premium.