Life Insurance Underwriting

    A First-Time Policy Buyer’s Guide To Life Insurance Underwriting

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    Many people apply for life insurance online because it’s fast and convenient, only to find that the actual process of buying a policy can take weeks – in some cases, even months. This delay is caused by the underwriting process, which refers to a period of assessment conducted by insurers to determine each client’s relative risk.

    This process may involve a series of tests and exams, which covers your basic information, health history, and potentially even your driving records! Read on to find out how the underwriting process works, what your underwriter considers, and how it affects your policy rates. 

    What Is Life Insurance Underwriting? 

    When you apply for life insurance, an underwriter evaluates your application and medical history to place you in the appropriate insurance classification. This process, called underwriting, helps your life insurance company determine the premiums you’ll have to pay on your policy.

    Because all insurance companies want a comprehensive picture of each client before providing them with a policy, the life insurance underwriting process usually takes weeks. To help you understand why let’s go into detail about what a life insurance underwriter actually does.

    How Does Life Insurance Underwriting Work? 

    Every insurance company has its own set of underwriting guidelines. That means specific processes, medical exams, and the order of steps can vary. 

    However, most underwriting processes usually adhere to the standard formula – gathering medical information, verifying this information through a series of medical exams, checking motor vehicle and driving records, and conducting credit checks – to determine a client’s insurance risk. 

    Life Insurance Application Process

    Whether you want a term life insurance policy or a whole life insurance policy, the first step is starting the application process. This involves getting in touch with the insurance company of your choice and providing basic medical and lifestyle information. 

    You’ll have to disclose your age, gender, height and weight, number of children, income, desired death benefit/amount of coverage, and family medical history. The life insurance underwriting process officially begins after you’ve submitted your application along with all the pertinent documents.

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    Paramedical Exam

    A client’s general health is one of the most critical factors that affect your insurability. Paramedical exams help insurers verify your medical status and are typically free of charge – costs are shouldered by the life insurance company. This exam can be conducted at your place of work or even at home, depending on your preferences. 

    Each medical exam consists of three parts, and the results of every test are sent to your underwriter and insurer. Clients should expect the following information to be collected:

    • Basic information: Your insurer will require you to disclose your height, weight, and blood pressure (BP). Factors like your body mass index, or BMI, can be useful indicators of future health conditions. Having a high BP may result in higher rates.
    • Blood test results: Blood tests are an efficient way of identifying high-risk clients. Heart disease, stroke, diabetes, and other serious health issues will impact your premiums.
    • Drug test results: A urine test notifies the underwriters of a potential client’s drug use. Exams can identify amphetamines, cocaine, and other illegal drugs. Some insurance companies may reject an application based on the results, but others may simply adjust your life insurance premiums. Given this, casual marijuana use rarely impacts a policy’s rates.

    Keep in mind that you’re not obligated to buy a policy just because you’ve completed a medical exam with a specific life insurance company. In fact, the results of your exam can be used when applying for health insurance or disability insurance at other companies. 

    Attending Physician Statement

    If your exam results raise some concerns, you may be required to get an Attending Physician Statement or APS. An APS is a medical professional’s interpretation of your medical history, providing insight into a client’s health beyond just height and weight. This summary includes relevant information about any underlying conditions, the status of potential health risks, and your prognosis. 

    Generally, clients who need an APS should expect increased life insurance rates. However, there are some situations where this may not apply. For example, let’s say your underwriters are concerned about your high blood pressure. If it turns out that this is a side-effect of the medication you’re taking, a physician can note that in your APS. In this case, life insurance companies may be more lenient.

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    Medical Information Bureau Check

    The next part of the life insurance application process is the Medical Information Bureau (MIB) check. The MIB is a trade organization that exists to help providers identify insurance fraud. This bureau provides insurers with your recent insurance applications, which enables them to spot withheld or inaccurately reported information.

    Prescription History

    Once all the physical exams have concluded, your underwriter will verify all the medication prescribed to you over the last five to seven years. As with the APS and MIB check, this stage of insurance underwriting is concerned with fact-checking and confirming the information you provided. 

    Note that not all life insurance policies will require a prescription check, especially when the potential client isn’t exceptionally high-risk. 

    Motor Vehicle Report

    Your motor vehicle reports, which include your accident and driving history within the last seven years, are also essential to the underwriting process. Your history of traffic citations, vehicular crimes, DUIs, and general driving-related issues all affect your life insurance premium payments. This is because your driving record is usually indicative of how risky it would be to insure you. 

    Final Underwriting Rating

    There is one final step before a client can buy life insurance: obtaining their final rating. This rating is based on all the risk factors that underwriters consider, which includes basic information, tobacco use, and general lifestyle. The results from the physical exams are also compared to other applicants within the same age range to arrive at a final rating or risk classification. 

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    Risk Classifications Explained

    Once your underwriter has confirmed the details of your life policy application, you’ll receive your risk classification. These classifications are basically a grade that your underwriter assigns to you that determines how much you will have to pay for your life insurance coverage.

    Let’s break them down below:

    Preferred Plus

    Whether you’re looking for term life insurance or whole life insurance, having a preferred plus classification means you get the best possible rates on your policy. However, insurers can be quite strict about the requirements for this classification. Qualified clients are usually in excellent health, don’t have a dangerous occupation or hobby, don’t use tobacco, and have no family history of heart disease or cancer. 


    Even if the applicant has diabetes, is slightly overweight, or is at risk for other medical complications, they can still get excellent rates. An underwriter may give a preferred rating if the client is in excellent health but is taking medication to manage high blood pressure and cholesterol. The presence of medication on an applicant’s profile indicates that the condition is being managed, therefore lowering their risk of premature death. 

    Occasional smokers may also qualify for the Preferred Smoker risk class. Applicants are required to be in above-average health without any other underlying issues. 

    Standard Plus

    Clients in the standard plus category are considered low-risk by underwriters and receive below-average premiums. Individuals in this category are usually in good health but may be slightly overweight, have some manageable medical issues, or are of advanced age. 


    Most applicants end up in the standard classification. This class includes all applicants with relatively high BMIs, riskier occupations, a less-than-perfect driving record, and some medical issues. 

    Because the vast majority of applicants fulfill at least one of the above criteria, insurers usually offer average rates for this class. They may also be more lenient when making policy-related decisions. For example, applicants in the standard category can have a history of smoking tobacco but still be considered for non-smoker rates, as long as they’ve abstained for more than 12 months.


    When an insurer classifies someone within the substandard category, it usually means that the client is riskier than the average applicant. This applies to applicants with significant medical issues and no history of being treated. Applicants with a history of alcohol abuse, severe asthma, bipolar disorder, epilepsy, multiple sclerosis, type 1 diabetes, and a history of cancer may qualify for this classification. 

    Risk Classification HealthFamily HistoryOther Factors
    Preferred PlusExcellent with no underlying conditionsClean with no history of cancer and heart disease No dangerous occupation or hobbies and no tobacco
    PreferredGood, slightly overweight with some conditionsHistory of high BP or cholesterol is usually acceptableNo dangerous occupation, hobbies, and no tobacco
    Standard PlusAbove average, slightly overweight or over 40Relatively clean history with manageable conditions Some maintenance medication is acceptable
    StandardAverage and/or overweight Family members have a history of heart disease or cancerMultiple medications, somewhat risky hobbies, and occupations are acceptable
    SubstandardSignificant health risks, multiple medical conditions Family members have a history of heart disease or cancer before 60 years of ageMultiple medications, risky hobbies, and occupations are acceptable
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    The underwriting process’ main goal is to make sure you get the appropriate amount of coverage for your situation. It assesses the risks of insuring you and adjusts your premiums based on your risk classification. Some clients’ cases may be significantly more complicated than others due to insurance “red flags”.

    Everyone has different coverage needs, and that’s why many people contact financial professionals to help them get the perfect policy. Contact us at Wesley Insurance, LLC to find out how we can assist you with your application!

    Written By Cameron McDowell
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