Life Insurance Underwriting Process.

Learn Types & Guidelines.

by @Brad_Cummins

There are two kinds of life insurance underwriting options:  Simplified Issue and Fully Underwritten.  Depending on the type of underwriting a life insurance policy requires – and based on the differing guidelines among a variety of insurers – these factors will influence everything from the length of time it takes a company to issue a policy to the price you will pay for coverage.  Each of these two life underwriting processes has its own separate procedures, flows and rules, which we address below.

The Two Types of Life Insurance Underwriting.

Simplified Issue Underwriting.

Simplified Issue underwriting does not require you to undergo a medical exam. That advantage has its own limitations, however, since it means you will have less latitude concerning the amount of the death benefit associated with this type of policy. At the present time, our best Simplified Issue carrier will only offer a maximum of $400,000 in coverage. The good news is this: If you apply for a Simplified Issue life insurance policy, you may be able to get you approved for this coverage in just 15 minutes.

The underwriting process from a Simplified Issue carrier is the result of three reports: MVR (Motor Vehicle Record), MIB (Medical Information Bureau) and RX (Medical Prescription Report). And, just because this policy is a “No Exam” type of life insurance, that does not mean there are no underwriting guidelines.

A Simplified Issue life insurance policy does, in fact, have qualifying rules that an applicant must meet. The underwriting approval decision is the result of a review of the information included on the application for coverage, along with material gathered from the “Big Three” reports referenced above: MVR, MIB and RX.

Bear in mind, too, that most life insurance companies have a cap on the amount of insurance you can purchase when you choose a Simplified Issue product. You can learn more here about No Exam Simplified Issue policies, in addition to which life insurance companies offer this coverage.

Fully Underwriten.

A Fully Underwritten policy will have all the necessary reports – the proverbial Big Three – that a Simplified Issue carrier will also review. With regard to these reports and the differences between these two types of coverage, an underwriter for a Fully Underwritten policy may delve deeper into this material.

The underwriter may order several more requirements (see below), resulting in an average underwriting process that can range from 4-8 weeks.

Possible Additional Requirements.

Medical = Medical Exam by a Physician or a Paramedical Company.
APS = (Doctors’ Records) for Review.
BCP = Blood Chemistry Profile.
HOS = Home Office Specimen (Urine) .
ECG = Resting Electrocardiogram.
TRD = Treadmill Electrocardiogram.
CS = Cognitive Screen.
PFS = Personal Financial Statement.
PHI = Personal History Interview.

The Underwriting Process.

Underwriting is an essential part of buying life insurance. Every applicant goes through some sort of underwriting process, so he or she may qualify for coverage.

Once a life insurance company receives your signed application, that carrier will begin an evaluation process – this is the foundation of any underwriting procedures – to determine your eligibility for life insurance, and, should you qualify for coverage, the rate you will pay for a particular policy.

Please note: Applying for life insurance is not a guarantee that you will receive an offer to purchase a policy. A life insurance company may conclude that you are ineligible for the policy you seek to buy, or you can only get coverage on a modified basis at a higher rate.

Your life insurance application is the primary source of information an underwriter will review. Your answers must, therefore, be thorough and true. You must inform us of any changes to your responses before accepting delivery of a policy.

In fact, your signature on an application is confirmation that you will comply with these rules. We may also seek information from other sources, to help us better evaluate the material disclosed on your application.

Two Application Parts.

Part A

Part A of a life insurance application involves the submission of basic information like: Your name, address, telephone number, Social Security number, driver’s license number, marital status, occupation and income, financial status, and whether you are a smoker or a nonsmoker.

Part A forms the foundation of the type of policy, and the name of the product, that corresponds to your application. Part A will determine ownership of the policy and payor information. It will also be the means by which an applicant makes beneficiary designations and allocations to one or more beneficiaries.

In addition, Part A may require an applicant to answer a series of general questions about his or her health.

Part B

Part B of a life insurance application includes information from an applicant’s doctor and answers regarding that applicant’s medical history. This section is where the medical underwriting process starts.

The combination of an applicant’s medical history, and the results from a life insurance exam, will enable an underwriter to ensure that that person qualifies for a life insurance policy at a particular rate class.

The answers to Part B may require the submission of additional information like a physician attending statement (APS).

When and Where Underwriting Begins.

Life insurance underwriting begins when an agent speaks with a prospective client about a life insurance quote. A wise agent will know how to help this potential consumer well before he or she submits a signed application to a life insurance company.

If the agent does not field the underwriting process beforehand, and does not give a person an accurate quote, then the applicant may be the unfortunate victim of massive sticker shock – he or she could be paying much more than their original quote.

Local Life Agents understands that determining a consumer’s rate class, as well as the cost of a specific life insurance policy, is more of an art than a science. Which is to say, we have the knowledge that only comes from years of hard work – we have the skills that are the result of preparing thousands of applications – to appreciate how good an agent must be to seamlessly handle the complexities of the underwriting process.

Life insurance underwriting process

Things That Can Slow down the Underwriting Process.


A fully underwritten life insurance policy can take an average of four to six weeks to receive approval. This process can take even longer if an underwriter orders an APS, to see if there are any health matters or proverbial red flags that may be an issue of concern on the application or MIB reports. APS materials can slow down the underwriting process a great deal because the underwriter will have to wait for a doctor to gather and send these records for an underwriter to review.

Large Case Underwriting.

Most life insurance companies have special underwriters who work on large case types of life insurance. A large case underwriting department may handle cases worth $10 million and/or premiums over $100,000 for a policy. When dealing with life insurance policies of that size, the underwriting process may be more extensive because the risk is greater than other policies.

Sample Underwriting Requirements Chart.

Underwriting requirements are the result of an applicant’s age and the face amount of a specific policy.

what is underwriting

The Biggest Mistake Consumers Make Involving Life Insurance Underwriting.

The biggest mistake consumers make when trying to buy life insurance is their blind submission of an application, where these men and women fail to get the advice of an independent agent who has a thorough understanding of the underwriting process. This mistake is significant because every life insurance company has different underwriting guidelines. For example: If you are 5’10 and weigh 203 pounds, you may be able to qualify for a Preferred Rate with one company and not another. Local Life Agents will help you apply to the company that will give you the best chance of qualifying for the best rate class.

Remember: The underwriting process is a standard part of trying to buy life insurance. A good way to educate yourself about life insurance involves going online. But an online quote is meaningless until the underwriting process is complete.

Local Life Agents will explain the details of the underwriting process to you – we will inform you about the individual health impairments and the submission of materials that will influence how long this process will take – so you have the news you need and the counsel we provide.

“Our best simplified issue carrier can issue up to $1,000,000 of life insurance in as little as 15 minutes.”