Q

How does the life insurance underwriting process work?

A

Underwriting gives insurers a clearer look at your health history and background and determines your premiums.

Rebecca Shoenthal author photoNupur Gambhir

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Rebecca Shoenthal

Rebecca Shoenthal

Licensed Insurance Expert

Rebecca Shoenthal is an insurance editor and licensed Life, Health, and Disability agent at Policygenius in New York City. Previously, she worked as a nonfiction book editor. She has a B.A. in Media and Journalism from the University of North Carolina at Chapel Hill.

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Nupur Gambhir

Nupur Gambhir

Life Insurance Expert

Nupur Gambhir is an insurance editor at Policygenius and licensed Life, Health, and Disability agent in New York.

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Expert reviewed

This article has been reviewed by a licensed Policygenius expert to ensure that sources, statistics, and claims meet our standard for accurate and unbiased advice.

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Eloise Spinello

Eloise Spinello

Associate Director, Carrier Relationship Management

Eloise Spinello is a life insurance expert and the Associate Director of the Carrier Relationship Management team at Policygenius. She has worked in life insurance case management for ten years and has strong expertise in understanding underwriting requirements, trends, and processes. Eloise currently manages carrier partnerships at Policygenius, as well as focuses on maintaining a positive experience for Policygenius customers. Previously, she worked at Lenox Advisors.

Updated April 8, 2021|10 min read

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After you apply for life insurance, you go through a process called underwriting with the insurance company. An underwriter works on behalf of the life insurance company to determine if you should get the premium you were originally quoted. They evaluate your application details, health information, and lifestyle to give you an insurance classification, which correlates to how likely you are to die before the end of your policy’s term and your premium is based on that.

All insurance products involve some degree of underwriting to get a picture of who you are based on your personal background and how it relates to the kind of insurance you’re purchasing. Some parts of the life insurance underwriting process require action on your part to verify your application answers, while others require the input of someone else, such as your doctor.

Although underwriting can take an average of four to six weeks to complete, according to Policygenius data in 2021, an insurance broker can make the process easier by shopping around your underwriting results to different providers to get you the best pricing. Below, we’ll walk through all the steps to expect while navigating the underwriting process. 

Key Takeaways

  • Underwriters set your life insurance premiums using information about your health and lifestyle

  • The underwriting process usually involves a medical exam and review of your prescriptions, hobbies, and driving record

  • An underwriter may give you a credit for better premiums if you are actively working to improve your health

What does a life underwriter do?

A life insurance underwriter's main goal is to paint a comprehensive picture of the applicant’s life.

As the underwriter goes through each step in the process, they learn more about who you are, your medical background, and what you do, which helps them predict your life expectancy. 

Key underwriting factors

Underwriting includes a detailed review of your life insurance application. Here’s how underwriters look into each of the following aspects of the application:

Age

Other than setting what age/amount requirements are needed, age is a key underwriting factor. Although life insurance premiums are lower when you’re younger, older is better for most medical histories from an underwriting standpoint because the longer it’s been since you, for example, quit smoking or had a heart attack, the healthier you are to the insurance company.  

Gender

Females generally receive lower premium rates than males for life insurance. Women live about six to eight years longer than men on average [1] , and insurers take their longer life expectancy into account when setting pricing for each risk class. However, other medical risks are also considered, regardless of gender.

Address

Even though mortality rates vary based on zip code, underwriters don’t consider where you live. Instead, they’ll use your address for financial underwriting. Many people list their home as their largest asset, so confirming your address can help the underwriter determine premiums.

Citizenship status

U.S. citizens and permanent residents won’t have any issues applying for life insurance, but temporary visa and green card holders or individuals who have been in the U.S. for less than one year can sometimes be uninsurable. 

Occupation or employer 

Most occupations are considered “safe,” but some have increased mortality rates. Military special forces or lumber workers, for example, could require a flat extra, or be declined.  

Income & net worth 

The amount of life insurance you buy should reflect the financial loss to your beneficiaries if you die. It is not intended to make someone worth more dead than they are alive. So the amount of life insurance you apply for has to match your financial situation.

Face amount

The higher the face amount, or death benefit, the more requirements are needed by insurers to confirm your risk. Your financials are used in conjunction with how much life insurance you apply for to justify the amount. 

Coverage in force

If you have other life insurance policies, underwriters check to make sure you aren’t applying for too much additional insurance

Owner/beneficiary

Insurable interest, or proof that your beneficiary will suffer financially if you die, is checked during underwriting. Most close family members – such as your spouse – have an insurable interest, but if you want to make a non-family member your beneficiary, you need to provide proof of the financial relationship. 

Previous ratings or declines

Your previous life insurance application records, including health classifications or declines, help notify the underwriter of potential problems. 

Tobacco use

Smokers will pay more for life insurance than non-smokers. Your medical history related to tobacco use is also used by underwriters if you have a history of pulmonary diseases or oral cancers, for example. 

Foreign travel

Countries fall into categories based on safety issues, medical care availability, and government stability. Travel to more favorable countries does not have an impact on your life insurance rates whereas travel to countries of concern can make you uninsurable. The frequency of travel and length of stay is also considered.

Hobbies

As with occupations, certain hobbies or avocations will affect your classification rating, such as aviation, since there’s usually increased risk. 

Driving history

Motor vehicle accidents are a leading cause of death in the U.S., according to the CDC. Adverse driving history (speeding, accidents, or DUIs), can lower your rating or lead to an application decline. 

Military

Most military members can get life insurance. However, those with more dangerous duties (fighter pilots, Navy SEALs, or people being deployed to dangerous areas) could be uninsurable. 

Criminal history

Insurance companies are generally cautious about criminal histories. Less serious misdemeanors won’t have a big impact on your rates, but convicted felons currently on probation will not be considered.

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The underwriting process

Every life insurance company has its own underwriting manual or guidelines to determine your final premiums.

An underwriting manual can include:

  • Which service to use for ordering an attending physician statement (APS) 

  • Prescription history report requirements

  • How height and weight should correlate to health classifications 

  • Income restrictions

What follows is a standard set of tools and tasks for an underwriter, but the specifics of what’s used, when, and how won’t be the same across companies.

Step 1: MIB check

This step happens before the underwriter looks at your application in detail. The MIB (previously known as the Medical Information Bureau) is a trade group that helps insurers share medical data and prevent fraud. The MIB allows insurance underwriters to see coded details about your medical records from previous life insurance applications (dating back three to five years).

If you’ve applied for life insurance with different providers in the past, it won’t hurt your classification. Rather, an MIB check helps the underwriter by showing them the date of any medical impairments, treatments, and diagnoses as reported by previous life insurance underwriters. This checks and balances system helps keep premiums lower for insurers and consumers.

Step 2: Application quality check

After the MIB check, the insurer goes through your life insurance application to make sure all of the correct information is there. It’s not uncommon for applications to be accidentally incomplete. Unless the missing information is related to your medical history, an incomplete application won’t slow down the underwriting process.

Most insurance companies conduct a phone interview to verify the information on your application. The call usually only takes between 15 and 30 minutes and you’ll be asked about your health history, hobbies, and finances.

After that, you’ll start the official underwriting process. Each step can add some time to your application, but it’s necessary to finalize the premiums you’ll pay over the life of your policy.

Step 3: Paramedical exam

The first official step of the underwriting process involves looking at the results of your paramedical exam. The medical exam is similar to a checkup with your doctor, except it’s free to you. A medical technician will perform the exam at a lab or your home or work.

The results of your exam are sent to the underwriter. The exam information an underwriter uses falls into three main categories:

  • Basic measurements: Height, weight, blood pressure— the typical steps of a physical. Your height-to-weight ratio plays a big role in how you’ll be classified and, ultimately, what you’ll pay for your life insurance policy. Your blood pressure reading can show high blood pressure, which becomes a particular concern as you get older and impact your rates.

  • Blood test: A simple blood test can reveal potentially risky health concerns. Heart disease, stroke, diabetes, blood-borne illnesses, and more can all be discovered and analyzed using a few vials of blood.

  • Drug test: A urine test for a full drug panel will alert the underwriter to the use of drugs like amphetamines, cocaine, barbiturates, and more. Generally speaking, drug use makes you riskier to insure and raises your premiums (unless it’s marijuana, which certain insurers treat much more leniently than others).

You can reuse the results of your paramedical exam to apply for other types of insurance, like disability insurance, or even for life insurance from another provider. You’re under no obligation to go with a particular life insurance company just because they paid for your medical exam.

Some insurance companies have policies and underwriting processes that allow you to skip the medical exam. While people with health concerns can be approved for some no-exam policies, they’ll have lower benefit amounts and higher premiums. No-exam options that offer similar premiums and coverage amounts to a regular term life policy, such as accelerated underwriting insurance, are only available to people who are generally healthy.

Step 4: Attending physician statement

If there are red flags from your paramedical exam results, the underwriter will order an Attending Physician Statement (APS).

An APS is a summary of your medical history from your doctor’s point of view. It provides the status of each condition your doctor is treating and information about the condition, such as how long you’ve been treating it, how long symptoms have been present, and your prognosis.

For example, if you showed signs of high blood pressure during your exam, an APS would let an underwriter know the underlying cause. In that way, it complements the paramedical exam by getting into the finer details of your health.

This step can prolong the life insurance underwriting process, adding anywhere from a few days to a few months, depending on how long it takes for a doctor’s office to comply with the request.

Step 5: Prescription check

The underwriter will check all the medications prescribed to you over the past three to five years. As with the paramedical exam, APS request, and MIB check, the prescription check confirms the information in your application.

Whether your underwriter requires this step depends on your other medical reports. Life insurance policies with higher coverage amounts may also require a prescription check.

Step 6: Motor vehicle report

A motor vehicle report, or MVR, details your driving history as far back as seven years. It notes driving violations like traffic citations (think: speeding or reckless driving tickets), vehicular crimes, accident reports, driving record points, and DUI convictions.

Your premiums will be higher than someone who has a clean driving record if your MVR reports anything concerning. If you have a recent DUI on your record, you may even be denied a policy.

Step 7: Actuarial tables

Life insurance underwriters use an actuarial table — a statistical analysis of your life expectancy — to estimate the likelihood that you’ll die at any given age and what risk you pose to the insurer. Where you fall on an actuarial table depends on your unique health profile, including smoking status, any medical diagnoses, family history, and your occupation.

Underwriters look at two separate actuarial tables during the underwriting process:

Mortality table

A mortality table shows the mortality probability of a given population, based on age and gender, and doesn’t account for the many variables that are unique to each health profile. It’s used as a statistical baseline to predict when you’re most likely to die.

Build table

A build table takes your body mass index (BMI) — which looks at your height and weight — to determine how healthy you are and predict your life expectancy. 

Life insurance may be more expensive if you are overweight or obese, according to CDC standards. But multiple coverage options are available for most individuals, and rates can improve if you lose weight later

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Step 8: Credit system

After the underwriter has gone through all of the tests, tools, and checks needed to set your insurance classification, the last thing they may do is use a credit system to give you a little bump to help you get more affordable premiums.

If a chronic illness results in a Standard (or Substandard) classification, the underwriter’s credit system can make your premiums more affordable if you’re actively taking steps to improve your health and undergoing preventative care.

The APS and prescription check let an underwriter know what you’re doing to keep health problems from getting worse, which can boost both your health and your wallet.

There’s also the option to lower your premiums by reapplying for life insurance in the future once you’ve taken steps to improve your health. 

Step 9: Your final rating

Unless you pursue a no-exam policy, the underwriting process can take anywhere from five to six weeks. Outside sources — like a doctor’s office for an APS — can add time too. But once the process is complete, all that’s left is to confirm the premiums and sign the policy to put it in force

The underwriting process may seem complex, but once you provide some initial information, completing the process is straightforward and doesn’t involve much legwork from you. Your insurance agent or broker can ensure that you have a smooth experience, and if you need to skip over some underwriting steps, a no-exam policy can accelerate your timeline to an offer so you can secure financial protection for your loved ones.

Underwriting process FAQs:

What is life insurance underwriting?

Underwriting is how life insurers rate the risk of insuring you to set your premiums. Underwriters evaluate personal information like your age, health, gender, hobbies, occupation, driving record, and medical history.

How long does the life insurance underwriting process take?

The underwriting process takes approximately four to six weeks, though delays in ordering records or scheduling exams can extend that timeline. No-exam life insurance may offer approval in as little as one to two days, but can take up to two weeks with some insurance companies. Brighthouse can offer same-day coverage for qualifying applicants.

What do life insurance underwriters look for?

The underwriter looks for risk factors that could shorten your lifespan, like a smoking habit, personal or family history of illness, old age, or a skydiving hobby. The more risks you present, the more you’ll pay for your policy.