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Harleysville Life
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Understanding underwriting
Before you can purchase coverage, you must qualify by meeting specific
requirements during the underwriting process. This helps us determine the
rate you will pay, based on the level of risk you pose.
Different people pay different rates for life insurance coverage, based
on a number of factors. For example, a tobacco user presents a higher risk
and has a shorter life expectancy than an applicant who does not use
tobacco products. Therefore, a smoker will pay a higher premium for life
insurance than will the non-smoker for the same amount and type of
coverage.
When you apply for life insurance, we will examine a number of factors
based on underwriting standards and guidelines. These factors include:
- Your current health and physical condition
- Your medical history
- Your vocation (A race car driver, for
example, presents a higher risk than an office worker)
- Personal habits (including tobacco use and
a history of alcohol or drug abuse)
- Your avocations and hobbies (Hang gliding,
for example, is a high-risk pastime that could increase your
premium)
- Your age and gender (A 50-year-old
applicant will pay a higher rate than a 30-year-old; rates for women
are generally lower than those for men since women enjoy longer life
expectancies)
Processing the information
Once received by us, all personal and financial information is held in the
strictest confidence. A specially trained underwriter will review and
evaluate these factors, and develop a risk profile. The final premium is
based on this risk profile.
Risk classifications
Each application for insurance is reviewed to determine if the individual
meets the underwriting standards established for the product being applied
for. Here are four common categories:
- Premier/Preferred: If you are a
better-than-average risk (i.e. in good health, with no dangerous
hobbies or history of health problems), you may be charged a premier
or preferred rate.
- Standard: If you are considered an average
or typical risk, you will be charged the standard rate.
- Rated: If you pose an above-average risk
(perhaps you have significant health problems), you may be classified as an increased risk
and charged a higher premium.
- Declined: If you are rated as uninsurable
(perhaps due to a serious illness), you may be denied coverage
entirely, or have coverage deferred for a short period of time.
If you are rated or declined, remember that a rating is not always
permanent. If you quit smoking, lose weight, bring down your cholesterol
and blood pressure—just to name a few—your rating as an insurance risk
may change and the premium reduced.
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