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IC 22 Life Insurance Underwriting Notes

The document discusses the concept of life insurance underwriting. Underwriting involves assessing, selecting, classifying, evaluating, measuring, and rating individuals to determine the level of risk and estimate their mortality based on mortality tables. This allows underwriters to evaluate the risk of providing life insurance, price the risk, and make a decision to accept the risk as standard or sub-standard, postpone or decline it, and determine any extra premium that may be charged over the standard premium.

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3K views1 page

IC 22 Life Insurance Underwriting Notes

The document discusses the concept of life insurance underwriting. Underwriting involves assessing, selecting, classifying, evaluating, measuring, and rating individuals to determine the level of risk and estimate their mortality based on mortality tables. This allows underwriters to evaluate the risk of providing life insurance, price the risk, and make a decision to accept the risk as standard or sub-standard, postpone or decline it, and determine any extra premium that may be charged over the standard premium.

Uploaded by

MAY
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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IC 22 Life Insurance Underwriting

Chapter 1

1.1 Concept of underwriting

Understand the concept of Underwriting

The Process of:

 Accessing
 Selecting
 Classifying
 Evaluating
 Measuring
 Rating
- Level of risk associated with an Individual. Decision is taken accept or not.
- Mortality = how long the individual expected to live, excluding the unexpected factors .

Based on these Mortality Tables, Underwriter make an estimation about individual’s mortality and Make
a decision about accept or decline the case.

Two aspects:

(1) Evaluation of the risk associated with the providing life insurance cover to an individual

(2) Pricing the risk

1.2 The Process of Underwriting

Classification of Risk

- Standard Risk
- Sub Standard Risk

Rating the risk

- Mortality High
- Mortality Low
- Mortality substantially high

Taking a Decision

- Accept the risk


- Accept the risk with special term
- Postpone the risk
- Decline the risk

Premium to be charged

- Standard Premium
- Extra premium over standard premium

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