What Is Underwriting?

When applying for life insurance, you may hear the term “underwriting” being used. This refers to the process that an insurance company undertakes once an application has been completed and helps to assess the eligibility of a client.

During the underwriting process, the insurance company will consider the level of risk involved in insuring a person. This is where elements such as medical history, past times and occupation are taken into consideration.

If a client has a history of serious medical conditions, takes part in hobbies that have a high element of risk, or are required to do hazardous duties for their occupation, the insurance company may apply one of the following:

• Loading – this is where the premium will be increased from the original quote that has been provided. For clients this is a preferred form of action as, even though your premium has been increased, you will still be covered for everything.
   
• Exclusion – The other option a company will take is to apply an exclusion. An exclusion means that the company are still happy to provide you with insurance but will not cover you for everything. For example of you have a history of a blood disease, this may be excluded. If you participate in hazardous activities such as scuba diving, this may be excluded.

For clients the preferred form of action is to receive a loading as, even though your premium will increase, you will still have full cover for your life insurance.

Unlike loadings, exclusions are not the best option to receive from a company, which is why at Lifeboker, we always find the most comprehensive insurance available, exclusions are used as an absolute last resort. As we deal with the top insurance companies we can do pre-assessments to see if another company will offer you the same cover without an exclusion.  We will try and find the best insurance for you.