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Any applications that pose reasonable risks are accepted

and those posing lower or higher than average risks are

accepted at lower or higher rates" of premium than normal.

Some may be triggered for pre-issuance medicals. Any

applications posing unreasonable risks are declined but only

after quantifying the risk as every lead that is declined has

already cost the insurer and it is denying potential

business. The job of accepting or declining the proposals of

insurance received by a company and deciding on the

premium at which to accept the proposals is done by the

underwriting department.

Underwriting is of two types:

- STP or Automated UW: In this category fall proposals of

lower sum assured; young age and no disclosures.

- Medical underwriting: Each insurer has a matrix that

dictates the tests/ medical examination a proposal with

differing variables of age, sum assured, medical history and

habits history. These cases are manually underwritten as

per life tables prepared by the Actuary. Based on the

findings, some extra tests may be triggered.

Different insurers in different countries have highly varying

matrices, which are partly dictated by their re-insurer.

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