Life insurance underwriting explained


When a person makes application for life insurance in Wichita KS, his application will be assessed for risk, and the risk will then determine the premium to be paid. This process id called underwriting. Underwriters are skilled in statistics and can determine based on a number of actuarial facts, just what the potential risk to the insuring company will be. The underwriter of insurance policies is a major contributor to the bottom line of an insurance company, who wishes to maximize its profit by keeping payouts low and income from premiums high.

The actual term “underwriting” appears to have its origins in the habit of signing the bottom of a risk assessment. The person who conducted the assessment documented all the information that he used in determining the risk and to indicate its accuracy and depth, the person signed under the contents of the document, hence the term “underwriter.”

Underwriting insurance in Wichita KS is not unique to life policies, different forms of underwriting is applicable to auto insurance, home and business policies. Each area of the insurance industry requires different and unique skills from the underwriters, but for life in particular, the understanding and assessment of medical risks and demographics is of particular importance.

When underwriting a life policy the first stage is to complete a profile of the applicant. The underwriter works in co-operation with the local agent who is dealing directly with the applicant. The underwriter, after receiving the initial information can go back and ask for specific medical records and other pertinent data. With this information in place, the underwriter can determine where, in the companies understanding, the risk level the applicant is. A young, fit, non-smoking female would be considered low risk, whereas an older male applicant with a history of smoking will be considered high risk. These risk assessments are what determines the premium as the company is assuming different levels of exposure.

Local agents for insurance in Wichita KS who deal directly with the applicant for any insurance can act as an underwriter. They can gather all the necessary information, and then either independently, or in co-operation with the head office underwriters, makes an offer of insurance. The offer discloses the amount of coverage that the company will extend and the premium. Once the client has the proposal in front of him, he can attempt to negotiate different terms. As an example, the client can request a higher premium to take advantage of a lower deductable in the case of health insurance.

Although the underwriter will be a college graduate, heavy in statistics and mathematics, he will invariably be given considerably more training upon his employment. In advanced underwriting, the underwriter can prepare to issue group policies or work with individuals with unique needs.


For life, small business, auto or home insurance in Wichita KS you are invited to request a proposal from Andy Woodward Insurance Agency. You can rest assured that you will be adequately covered in all respects.

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