What is underwriting?
Underwriting involves measuring risk exposure and determining the premium that needs to be charged to insure that risk. The function of the insurance underwriter is to only accept new plan members that will make the insurance company money and to protect the insurance company from risks that likely result in a loss. Each insurance company has a unique set of underwriting guidelines, but there are many similarities based on industry standards. In the health insurance industry, the underwriting process often requires that applicant provide health history and status. This is referred to as medical underwriting when the insurance company reviews the medical history of the applicant. The underwriters, during the underwriting process, may decide to make a counter offer to the applicant to balance the risk factor to the insurance company. This could include requesting a higher premium or placing exclusions on specific medical conditions. In the medical insurance underwriting process, the level of scrutiny is influenced by the type of health insurance and the laws of each state that govern the product type. For example, a short-term health insurance policy will involve less underwriting because the insurance company is not concerned about the long-term risk of insuring the applicant. Small group health insurance may require less underwriting because many states prohibit the insurance companies from declining the group application for medical reasons. In this case, underwriting is used to calculate premiums, view minimum participation guidelines and determine group eligibility. Insurance applications for lesser risk insurance policies, such as short-term health insurance and travel health insurance can be done through an automated program that can instantly approve or decline an applicant based on how they answer a series of questions. This automated underwriting process is commonly used for instant online applications and approvals, which save the insurance company time and money. 4 CommentsLeave a comment |
|
What is underwriting?
Underwriting is the process used by the insurance company to review any new application for coverage. This is a term used for all types of insurance, including health insurance, life insurance, auto insurance, homeowner’s insurance and others. Whenever you apply for insurance, you are required to complete an application that will include many questions that will be used by the insurance company to analyze your risk-factor and determine if they want to accept you as an insured member for the type of insurance for which you are applying.
I have seasonal allergies in the fall and have chiroproctic visits about 5 times a year. Would these conditions be enough to decline health insurance?
Comment by Farmer — January 3, 2008 @ 5:16 pm
Typically neither of these minor conditions will be cause for declination. However, this depends on the guidelines of the insurance company with whom you are applying, as well as the restrictions imposed on insurnace companies under the laws of your state. Most seasonal allergies are treated with over-the-counter medication, for which the insurance companies will not pay. If you are on a prescribed medication for allergies, the insurance company may place an exclusion on your policy for a specific period of time. For the chiropractic visits, it is likely that the insurance company may want medical records from the chiropractor in order to better understand why you are being treated. They will want to make sure that you do not have a condition that may later require corrective surgery.
Comment by admin — January 4, 2008 @ 6:12 am
My present job does not offer health insurance benefits so I am stuck trying to seek a plan on my own. I have been turned down by many companies because I exceed their weight requirements. I have lost weight since my last attempt at applying for insurance but I have more weight to lose and I know that I still exceed their requirements. How can I get insurance with a reputable insurance company to insure me? I have been offered insurance through other companies but the problem is, that most of those insurance plans are not accepted in the area in which I reside. I need good insurance and I am not afraid to pay for it but I can not get anyone DECENT to insure me. What can I do?
Comment by therapist — February 15, 2008 @ 10:04 am
Hi, quick question for you: How long does underwriting take to get done? I applied with BCBS some weeks ago but haven’t heard back. It was trough an agent though. I don’t have any preexisting conditions, at least not that I would think would qualify as such. I do have some allergies. Could that be why it is taking so long to get processed? I hope it is not a sign that they will decline me.
Comment by Jeremy — June 20, 2009 @ 10:46 am