If you’ve applied for a mortgage, then you remember all the information you needed to provide to the lender in order to determine your interest rate, which was partially based on your financial responsibility. That was an underwriting process. You will also have to go through an underwriting process when you apply for life insurance, although it will be based more on your health than your finances.
In the most basic sense, underwriting is the process of the insurance provider gathering the necessary information in order to determine the risk associated with covering you. For instance, someone who presents a low risk is more likely to live a long, healthy life, providing more years of premium payments.
While there are quick, streamlined life insurance policies out there, in most cases, you’ll be required to provide the following information during underwriting (which can take a few weeks):
- Medical records
- Your family’s medical history
- Driving records
- Occupation and hobbies
- And more
In addition, many insurance providers will require that you take a medical exam (paid for by the insurer), after which, your lab results will factor into the overall picture of your health.
Once the necessary information is gathered, you will be sorted into a rating class. This essentially groups people together who share similar risks. For instance, you might find smokers in a higher-risk rating class because of the illnesses associated with the habit. The better your rating class, your lower your premiums.
Are you wondering where you rank in terms of risk? Your independent insurance agent can help you start the process of applying for life insurance today.
It all starts with a free quote. Denver life insurance can be tricky to figure out. If you would like to work with an expert to go over options that work for you, please fill out the short form below.