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What is Underwriting & How Does it Work?

Life Insurance
Financial Professional getting information from a young couple

Once you've completed your insurance application, we like to take the time to explain the next steps. All applications go next to underwriting. This process typically takes up to four weeks, but it occasionally lasts longer depending on the complexity of the case.

Key Takeaways

  • Insurance companies evaluate applicants based on their risk levels, considering factors like age, gender, health, and occupation.
  • Additional information and tests may be required during the underwriting process, depending on the coverage amount and complexity of the case.
  • The underwriting process may involve medical exams, blood tests, electrocardiograms, and obtaining medical and financial records.
  • Confidentiality of the provided information is ensured, and privacy regulations are strictly followed.
  • The goal of underwriting is to make fair and informed decisions, provide affordable coverage, and fulfill promises in case of claims.

Evaluating Your Insurance Policy

Insurance companies select and classify insurance applicants according to their degrees of risk. This is done to help ensure fairness in insurance pricing. To help ensure that equal risks are treated equally, we rely on studies of large groups of people with similar characteristics. Factors such as age, gender, health and occupation directly affect claim results and influence prices charged. Requirements necessary to underwrite an application will be determined by factors including age, the amount of coverage requested and medical history.

When Additional Information is Needed

While the application is our first source of information, additional items – most of which are performed at our expense – may be needed to complete the underwriting process.

Only information having a direct bearing on the risk is requested, and we will always seek approval from the policy owner's and/or proposed insured person to perform any test.

These additional tests can include:

  • Medical Exam: A medical professional or physician will record your medical history, take measurements of height, weight, blood pressure and pulse, and obtain a urine sample.
  • Blood Test: Examples of screening tests include cholesterol, glucose, liver and kidney enzymes, and presence of HIV antibodies. Fasting six to eight hours, as well as refraining from vigorous exercise, is recommended prior to testing for more accurate results.
  • Resting Electrocardiogram (EKG): For certain conditions
  • Attending Physician's Statement (APS): An APS report from a doctor that describes your medical history. The APS provides us with actual medical records and a doctor's insight, which often allows us to provide coverage at more favorable rates. To expedite the process, proposed insureds or parents/legal guardians for juveniles should encourage doctors to provide this information in a timely manner if it is needed.
  • Motor Vehicle Report
  • Database Query: Medical, financial and employment records
  • Pharmacy Records 
  • Financial Information: Such information obtained from the policyowner or proposed insured, their accountant or financial planner may be required for larger-amount insurance applications, and it would be obtained only with authorization from the policyowner or proposed insured, as appropriate.

Maintaining Your Privacy

We understand that confidentiality of the information provided for underwriting purposes is very important. All information remains strictly confidential, and we comply with strict privacy, HIPAA and other state and federal regulations that are designed to protect records and information.

Our Commitment to You

We're committed to making an accurate, informed and fair decision on all applications. In addition, we strive to complete the underwriting process quickly and with as little inconvenience to you as possible.

If you're eligible for coverage, we'll charge a premium that represents a fair price for the insurance you applied for and, when a claim is filed, fulfill our promise to help provide protection that life insurance can provide. Equal price for equal risks is what the underwriting process is all about. Our goal is to keep insurance as available and affordable as possible.

The information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. This material is not intended to be used, nor can it be used by any taxpayer, for the purpose of avoiding U.S. federal, state or local tax penalties. This material is written to support the promotion or marketing of the transaction(s) addressed by this material. This material is being provided for informational purposes only. Columbus Life does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. Consult an attorney or tax advisor regarding your specific legal or tax situation. There are insurance related costs to a life insurance policy. Premiums paid must produce sufficient cash value to pay insurance charges.