Here are some important steps involved in the underwriting process
Step 1 - Application Review
Filling the proposal form:
Your application is first thoroughly reviewed to ensure that all data provided by you is accurate and complete.
Therefore, it is crucial that you -
➔ Carefully fill out your proposal form
➔ Don’t intentionally try to hide or provide incorrect information
➔ Provide every minor detail about every disease, illness, medical condition you’ve had in the past, surgery/treatment you may have undergone, etc.
Checking your application:
Next, the insurance company will evaluate your application.
In case there is a minor update or alteration to the application, it may not slow down the underwriting process. But, if there are gaps or missing information concerning your health or medical history, the underwriting process may take longer.
Underwriting phase:
After your application is checked thoroughly, it enters the official underwriting phase.
Step 2 - Financial Underwriting
Financial underwriting will be carried out at this step. The insurance company will ask you to submit various documents to assess your financial needs and check how much cover you are eligible for. Here are some of the documents you may need to submit -
■ Salary slips
■ Bank statements
■ Income Tax Returns (ITRs)
■ Aadhar card
■ Passport, etc.
The insurance company may also ask for details of other life insurance policies you may hold. Once you submit all the documents and details of the policies, they will determine how much cover you can choose under the life insurance policy you are planning to buy.
Please note - the list of documents you may need to submit will vary across products and insurance companies.
Step 3 - Medical Underwriting
After financial underwriting, the next step involves medical underwriting. Here, the risk you present to the insurance company will be assessed based on your medical history, lifestyle habits, etc.
Undergoing medical tests:
The insurance company may ask you to provide some medical details and undergo medical checkups. These may include -
Basic tests & measurements:
Tests like Treadmill Test (TMT) and measurements like height, weight, blood pressure, etc.
Blood test:
This will help determine whether you have any potential health problems such as diabetes, cholesterol and low haemoglobin, heart disease, and so on.
Drug test:
This includes a urine test that will be conducted for a drug panel. This test will inform the underwriter of any drug usage, smoking, alcohol intake, etc.
Other tests:
You may have to undergo an Electrocardiogram (ECG) to detect any heart disease or cardiac conditions. Then, based on your age and declarations made in the proposal form, you may be asked to undergo HIV tests, X-Ray, Liver and Kidney Function tests, etc.
The medical tests you need to undergo may also depend on the declarations you make in the proposal form, any pre-existing diseases you suffer from, the type of life insurance policy you plan to buy, the insurance company you buy from, the cover amount you choose, etc.
Assessment by the underwriter:
After you undergo the medical tests, the results are sent to the underwriter for assessment. At this step, the underwriter will thoroughly go through your test results.
Request for additional documents
Underwriters may sometimes request additional documents to know more about your risk profile and lifestyle. They may ask you to submit documents like an inspection report, past medical reports, independent information, etc.
Note - All applicants may not be required to go through a detailed medical examination before purchasing a life insurance policy.
Step 4 - Final Assessment Of Your Application
After the underwriting process is complete and your medical and financial assessment is done, the insurance company will either -
Offer the life insurance policy
The insurance company will issue the life insurance policy on the same terms and premium.
Make a counter offer
Basically, if the risk assessment determines that you are at a higher risk, you may be charged a higher premium (known as loading) for the policy. This is known as a counter offer.
If you accept the offer, the life insurance policy will be issued to you.
Please note:
- The underwriting processes can be different for different insurance companies as every insurance company has a different risk-taking capacity.
- The entire policy issuance process can take anywhere between 10 to 15 days. This, however, may vary based on your profile and the insurance company you buy from.
- If you are too risky to cover, you may not be issued a policy - your application may straightaway get rejected.