How Life Insurance Companies Evaluate You

They don’t just insure your life, they assess risk.

Before a life insurance policy is approved, insurance companies go through a process called underwriting. Underwriting is used to evaluate overall risk and determine eligibility, pricing, and coverage terms. The goal is to understand the likelihood of a claim over time, not to pass judgment on an individual.

Underwriting typically considers a combination of health, lifestyle, and financial factors.

Age
Age is one of the most influential factors in underwriting. In general, younger applicants are considered lower risk, which is why premiums often increase as age rises.

Health History
Insurers review personal and family medical history to assess long term health risk. This may include medical records, prescription history, or a medical exam depending on the policy and coverage amount.

Lifestyle and Habits
Daily habits and activities are also evaluated. Factors such as tobacco use, alcohol consumption, participation in high risk activities, or certain occupations can affect underwriting decisions because they influence overall risk.

Financial Profile
Life insurance underwriting also considers financial context. Insurers review income and financial history to ensure the coverage amount is reasonable and aligned with the applicant’s situation. This helps prevent over insurance and supports policy sustainability.

Coverage Type and Amount
The type of policy and the amount of coverage requested both impact underwriting. Different policies carry different risk profiles, and higher coverage amounts generally involve more detailed review.

Understanding how underwriting works helps explain why life insurance premiums and approvals vary from person to person. The process is designed to balance risk fairly while providing coverage options across a wide range of financial and life circumstances.

This content is provided for educational purposes only and does not constitute personalized insurance, legal, or financial advice.