What factors are considered in individual life insurance underwriting?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jun 29, 2022

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Life insurance companies each have their own extensive policy and procedure manuals they are supposed to follow in determining whether or not to issue an Individual Life insurance policy, and in pricing that policy. The insurer’s underwriters typically use a combination of factors that experience shows equates with the risk of death (and premature death).

They include the applicant’s answers to a series of questions such as:

(1) age,

(2) sex (except in several states that require “uni-sex” rates, even though actuarial data shows women live longer than men),

(3) height and weight,

(4) health history (and often family health history — parents and siblings),

(5) the purpose of the insurance (such as for estate planning, or business or for family protection),

(6) marital status and number of children,

(7) the amount of insurance the applicant already has, and any additional insurance s/he proposes to buy (as people with far more life insurance than they need tend to be poor insurance risks),

(8) occupation (some are hazardous, and increase the risk of death),

(9) income (to help determine suitability),

(10) smoking or tobacco use (this is an important factor, as smokers have shorter lives),

(11) alcohol (excessive drinking seriously hurts life expectancy),

(12) certain hobbies (such as race car driving, hang-gliding, piloting non-commercial aircraft), and

(13) foreign travel (certain foreign travel is risky).

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