Essentially, it’s how life insurance companies decide whether to approve or deny your application.
The carrier will determine your risk level, based on individual factors that make you “risky.” The carrier is “at risk” with every applicant because they are contractually obligated to pay a death benefit if you die while coverage is in force. Some applicants present more risk, and some present less. Your risk class is used to determine how much it will cost the carrier to insure you. Using their established underwriting guidelines, actuarial science, historical mortality data, and your unique risk factors, the carrier determines the premium rate necessary to issue your policy.
There are a variety of factors (which can vary by state) underwriters consider when determining your level of risk, including:
- Lifestyle choices like tobacco and alcohol use
- Personal health situation and medical history
- Family health history
- Driving record
- Criminal record
- Previous and concurrent applications for life insurance
- Financial position
- Foreign travel
Traditionally, underwriting can be a complicated process, and you might wait months before receiving a decision. Ethos has simplified this process, using technology to speed things up and get back to you faster. Most applicants receive a decision within a couple days or weeks.
You can help underwriting go smoothly by:
- Answering every question on your application with as much detail and accuracy as possible
- Completing any follow-up questions in a timely manner
- Completing any medical exams at your earliest convenience
- Contacting your doctor or medical facility to expedite the release of any requested medical records