Insurance Underwriting
Underwriting in insurance is about calculating and evaluating the risk of people who have taken insurance. It is the job of the underwriter to find out how much coverage the client should be entitled to, how much he or she should pay for, whether to agree to a particular risk element in the insured’s life and go ahead with the insurance etc. So when we are talking risk acceptance from the point of view of the insurance company, we imply the job of an underwriter.
The underwriter has to think from the insurance company’s point of view. He is there to help the insurance company make money while at the same time, making sure that its goodwill is not compromised. Every insurance company has its own set of underwriting rules and regulations that aids the underwriter to find out whether the company can or avoid that risk. This information is used to help understand and decide the risk acceptance of an applicant who applies for the insurance.
The basic way in which the underwriter works is as follows
1. Once the insurance application comes to the company, the underwriter goes through the application and obtains the permission from the person to check the medical record of the prospective client
2. The insurance company on behalf of the underwriter may meet with the insured again or do a phone interview to understand a person’s health and cognitive issues, if any
3. The underwriter reserves the right to ask for a copy of medical record from the family doctor of the insured or a specialist doctor
Once the medical record is handed out, the underwriter make a decision about what kind of insurance should be given to the individual. One should note that every company works different. For instance, if a preexisting disease is not taken into consideration by one company, the other may cover it partially. There may also be another company which covers that particular preexisting disease. Also as we know, the premiums are set in accordance with the conclusions formed by the underwriter. If a person is aged or has more than one illness, the insurance cost may be higher with increased premium.
There are chances when a physical test is needed for underwriting. This usually happens when there is no recent medical certificate with the patient; in other words, the applicant has not met with their doctor in more than 5 years, is aged more than 50 or has been taking prescription medicine without the advice of the doctor.
The insurance underwriter’s job is a very responsible one and next to insurance agents, who are face of the company, the insurance underwriter is very crucial, akin to the backbone of the insurance organization. There are high career prospects in this field, and it is advisable that those who have a good eye for calculation and are good with maths, while at the same desirous of being a part of the insurance field, should go and readily apply for the underwriter’s job