What underwriting actually looks at for life insurance

Life insurance is priced on mortality risk. Underwriting is the process of estimating yours.

What is assessed

Age and sex, the largest factors, and the ones you cannot influence.

Tobacco and nicotine use. The single largest modifiable factor. Smoker rates are typically two to three times non-smoker rates for the same person.

Definitions matter and are broad — most insurers treat cigars, vaping and nicotine replacement as nicotine use, and testing detects it.

Most insurers require a period of abstinence, commonly twelve months or more, before non-smoker rates apply.

Height and weight, assessed against a build chart. Ratings apply above certain thresholds, and the thresholds vary meaningfully between insurers.

Medical history, personal and family. Cardiovascular disease, cancer, diabetes, and history of stroke are the main considerations. Family history of early onset cardiovascular disease or certain cancers can affect rating.

Current conditions and medications, including how well controlled they are. Well-controlled hypertension on medication is treated very differently from uncontrolled hypertension.

Driving record. Motor vehicle reports are pulled. Recent impaired driving convictions have a substantial effect and can make coverage unavailable.

Occupation and avocations. Hazardous occupations and activities — aviation, diving, climbing, motorsport — can produce ratings or exclusions.

Financial justification. Insurers require that the amount applied for is reasonable relative to income and net worth, to prevent over-insurance.

The process

Application, including detailed health and lifestyle questions.

A paramedical examination in many cases: height, weight, blood pressure, blood and urine samples.

Attending physician statements requested from your doctors where indicated.

Database checks — prescription history databases, the medical information exchange used by insurers, motor vehicle records, and in some cases credit-based and public records data.

Then a classification and a price.

The classifications

Terminology varies by insurer, and the general structure is consistent.

Preferred plus, preferred, standard plus, standard, and then rated classes — table ratings — for elevated risk, each adding a percentage to the standard premium.

Separate tables exist for tobacco users.

The gap between preferred plus and standard is substantial, frequently fifty percent or more in premium.

What the tests detect

Blood and urine testing looks for indicators of conditions the applicant may not have disclosed or may not know about: elevated glucose, lipid abnormalities, liver enzyme elevation, kidney function markers, nicotine, and in some cases substances.

This is worth knowing because it means undisclosed conditions are frequently discovered anyway, and non-disclosure is a much worse problem than disclosure.

Non-disclosure and the contestability period

The most important thing in this article.

Answer every question truthfully and completely. Misrepresentation on an application can void the policy.

Most policies include a contestability period, commonly two years from issue, during which the insurer can investigate and rescind for material misrepresentation.

After that period, most policies cannot be contested except for fraud, depending on state law.

The consequence of non-disclosure discovered at claim time is that the death benefit is not paid, premiums are refunded, and the family receives nothing at the point it was needed.

The premium saving from omitting a condition is trivial against that outcome.

Where you are unsure whether something is relevant, disclose it. Underwriters decide relevance; applicants should not.

Improving the outcome

Apply while healthy and young. Rates are locked at issue, and every year of delay increases them.

Stop nicotine well in advance, at least twelve months before applying.

Manage controllable markers. Blood pressure, weight and lipids can move meaningfully with time and effort, and the rating difference is large.

Prepare for the examination. Schedule it in the morning, fast if instructed, avoid alcohol for several days, avoid strenuous exercise the day before, and stay hydrated.

These affect results measurably and legitimately.

Have your medical records in order. Delays are frequently caused by physician offices being slow to respond. Knowing your history and providing detail up front helps.

Shop across insurers. Underwriting standards differ substantially, particularly for specific conditions. An insurer that rates diabetes harshly may treat a history of a particular cancer favorably, and vice versa.

An independent broker who knows which carriers are favorable for your specific situation is genuinely valuable here.

If you are declined or rated

Ask for the reason in writing. You generally have a right to know the basis.

Check the underlying data. Errors in prescription databases and medical records occur, and you have rights to review and correct them.

Consider reapplying after a change in circumstances — weight loss, a period of stability on treatment, time since an event.

Many insurers will reconsider a rating after a defined period with evidence of improvement.

And consider guaranteed issue or simplified issue products as a fallback, understanding that they are considerably more expensive per dollar of benefit and frequently have graded death benefits in the early years.

General information about insurance underwriting, not insurance or medical advice. Underwriting standards and policy provisions vary by insurer and state. Consult a licensed advisor.