The life insurance underwriting process helps insurers calculate risk to ensure your life cover is tailored to you.
What is underwriting?
Underwriting is the process insurance companies go through when evaluating the risk of insuring someone's life. The lower the risk, the lower the premium you pay – and vice-versa. In some cases, the risk could be too high to accept a life insurance application.
When does the underwriting process occur?
You'll go through the underwriting process once you've completed your life insurance application, detailing your current health conditions and medical history. You can compare quotes online and start your life insurance application today.
How long does the underwriting process take?
It really depends. The underwriting timeline changes based on what you’ve disclosed in your application and what the insurers requirements are. For example, if you’ve disclosed information about taking part in ‘dangerous’ hobbies, you may be required to answer more questions. That being said, we find that the majority of our customers policies are completed within 2 - 3 weeks.
To avoid delays in the underwriting process, we highly recommend that you provide your medical information with your life insurance application. This way, the underwriters have a much better chance of getting your application through without having to request more information.
What key factors impact your level of risk?
There's a few key factors that are likely to contribute to an increase in your level of risk. These include your age, smoking status, current health conditions, occupation and your family's medical history.
Age: The younger you are, the lower the risk of terminal illness – it’s as simple as that. Of course this isn’t necessarily the case, but that’s all part of the calculated risk that underwriters go through. As you get older, the risk gets higher, and is reflected in the premium you pay.
Smoking status: Smokers generally have a higher risk of terminal illness than non-smokers due to the health problems smoking can cause. Therefore, smokers will likely pay a higher premium than a non-smoker. Read more about the effects of smoking when applying for insurance.
Current health conditions: If you have an illness or are regularly unwell, your risk will be higher than someone in good health. Insurers can decline your life insurance application if they think your current state of health is too high risk.
Occupation: If you have a dangerous job, such as an aircraft pilot or underground miner, your overall risk will increase. Whereas, if you had an office job for example, you'd be considered low risk. This is taken into account when deciding the premium you'll pay for your life insurance.
Family medical history: If a serious illness runs in your family, such as cancer, your level of risk is likely to increase.