After you submit a life insurance application, underwriting begins. The underwriting process lets life insurance companies determine whether they can offer life insurance coverage to applicants and the premiums they charge.
The insurance company will determine your risk level, based on individual factors. The carrier is "at-risk" with every accepted applicant because they're contractually obligated to pay a death benefit if you die while coverage is in force. Some applicants present more risk than others and your risk class is used to determine how much it will cost the carrier to insure you. Using their established insurance 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 various factors (which can vary by state) underwriters consider when determining your level of risk, including your:
Individual life insurance companies may have a different approach to weighing risk factors and evaluating risk, meaning premium quotes may vary from one company to another. Insurance companies can deny you coverage if they believe you present too much risk. However, because each company's underwriting process varies, their decision-making process also will.
Traditionally, the insurance underwriting process has been complicated, and applicants could wait months before receiving a decision. Ethos has simplified underwriting, using modern technology and predictive modeling to speed up the life insurance underwriting timeline and get you a decision faster. No medical exam is required, and applicants typically receive a decision in days, if not instantly.
To help the underwriting process go more smoothly:
Term life insurance policies through Ethos are either fully underwritten or simplified issue underwriting, depending on what you qualify for.
If you qualify for a simplified issue policy, you only need to answer a few health-related questions and may even get approved instantly. Ethos' whole life policy is guaranteed issue, so applicants who meet the standards will be guaranteed coverage.
Certain risk factors are out of your control, such as family medical history. But you can take action to influence your premium rate. Since your premium is dependent on your health and lifestyle choices, having healthy habits can help decrease your premiums. For example, balanced eating and regular exercise can help you maintain a healthy BMI, which is a key influencer of life insurance premiums. And if you smoke, quitting may lower your life insurance rate.