What is a life insurance underwriter?

When you apply for life insurance, you fill out an application. This application will have been created, and will be checked, by a life insurance underwriter. The underwriter decides whether the insurance company should cover you or not.

This may sound like the underwriter is looking for any reason to deny you insurance, but this is not true. They must decide whether you are too much of a risk to insure or whether they have a good enough understanding of the risks you may present. Based on that information they will decide whether to cover you, and how much to charge for your monthly premiums.

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What would make me a risk to insure?

Underwriters determine risk by predicting how likely your policy would be to pay out. The more likely your policy is to pay out, the less likely you are to be accepted for life insurance, or the more expensive it could be. They determine this by examining factors such as:

Personal details

Even the most basic personal details such as your age, gender and job can have an effect on your life insurance. Once you pass a certain age, you may not be able to obtain life insurance from some companies, or it will be more expensive. At the moment, women tend to pay less than men because women live longer on average. If the underwriter considers your job dangerous - for example if you work in the emergency services - you will also probably have to pay more. Other factors such as your BMI (body mass index) also play a part. If you are overweight or have high cholesterol this could affect your general health, thereby making you more expensive to insure.

Habits

If you are a smoker you should be prepared to pay more for your insurance. You are usually classed as a smoker if you have had any tobacco products in the last 12 months, even if it's not a regular thing. If you are a drug abuser or an alcoholic you may be refused cover, or will have to pay more for it.

Hobbies

Taking part in extreme or dangerous sports can affect your insurance. The underwriter will analyse the risk of your sport and decide whether they can offer you a policy. Sports such as boxing, mountaineering, cave diving and anything to do with flying (except in a passenger aircraft) is considered an extreme sport. Certain specialist policies have underwriters with a lot of knowledge about the specific risks of each sport, and may be able to offer you more tailored cover.

Before applying for life insurance, it may be worth getting healthy. Losing a few pounds and giving up smoking could save you a lot of money over the course of your policy. Shopping around can help you find a policy that is the best value for your individual needs.

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Related resources

• Financial protection
• Life & critical illness
• Term life insurance
• Whole-of-life insurance
• Is life insurance a good idea?
• Why is life insurance important?
• When will life insurance not pay out?
• What type of life insurance is best for young people?
• When will life insurance not pay out?

Tags: insurance, life insurance, advice, claims, underwriting, family

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