Page 21 - Life Insurance underwriting Ebook IC 22

Process of medical underwriting

1. Determine whether the proposal is to be underwritten on medical
or non-medical basis:

To determine whether a proposal is to be underwritten on a medical or
nonmedical basis, the insurer first evaluates whether the applicant falls under
the "mandatory" medical scheme or non-medical norms laid down by an
insurance company for the product the individual has applied for. These
norms are generally based on:
✓ the medical grid:
✓ the age of the life to be assured: and
✓ the total medical-sum-at-risk
✓ the product applied for
✓ the personal and medical history of the life to be assured

2. Calculation of medical-sum-at-risk (MSAR)

Medical-sum-at-risk refers to the total face-value or sum assured under risk for
a certain policy for ascertaining the type of medical tests to be done by the life
proposed as pre-insurance screening.

Highlights of the above section:

 Medical-sum-at-risk excludes the sum assured of waiver of premium

benefit rider and 'accident benefit rider.

 Only those insurance policies that have been issued by the
insurance company from which the applicant has applied for

insurance cover are considered

 MSAR does not include the amount of insurance with other insurance
companies within a period of 24 months preceding and including the

current proposal or application

 The Medical test requirements for the prospect will be based on the
medical-sum-at-ask that has been calculated.

 It should be noted that underwriting (assessing. selection and classification

of lives) is also done during the revival of lapsed policies, based on
specific rules applicable at that point of tine. As documented in the

Sashi Publications Pvt Ltd Call 8443808873/ 8232083010