Assessing Risk
Applicants are assessed for risk by a process of underwriting. Underwriting may take place in an automated underwriting computer filtering system. However the most detailed and holistic underwriting is still performed by experienced life insurance underwriters.
The underwriting process for critical illness is similar to life insurance underwriting in that it takes into account factors such as age, gender, smoking status, past medical history, family history, alcohol consumption, and body mass index. In the case of critical illness however, there is an increased emphasis on family history, smoking and bodymass index are risk factors that can demonstrate a marked increase risk with respect to critical illness cover.
Having underwritten an applicant in full, an underwriter can decide to accept the risk at the standard rate, or they may decide than an extra charge is warranted, or they may decide to apply exclusions of particular illnesses. If there is any amendment by an underwriter to the terms of acceptance, this has to be agreed by the applicant before the policy can proceed to issue.
Read more about this topic: Critical Illness Insurance
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