Page 2 - Life Insurance underwriting Ebook IC 22

CHAPTER –1

Life Insurance Underwriting - Principles & Concepts (Part-1)

1. Understand the concept of underwriting.

1.1 Concept of underwriting

Life insurance underwriting is the process of

 assessing:
 selecting:

 classifying:
 evaluating:

 measuring: and

 rating

1.2 Process of underwriting

For performing the task of underwriting, insurance companies hire professionals

who are referred to as 'underwriters' in life insurance underwriting an
underwriter follows the steps discussed below to decide whether to accept or
reject a particular risk.

a) Classification of risk

b) Rating the risk
c) Taking a decision on the risk

d) Premium to be charged to the proposer

1.3 Factors considered in life insurance underwriting

The factors that are analysed while selecting an individual for life insurance cover
in life insurance underwriting are discussed below:

a) Health related factors

 Medical history of the applicant
 Present medical conditions diagnosis and the treatment details

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