Medical Underwriting

Example

“During medical underwriting, the insurance company requested Mark's complete medical records and required a physical exam before approving his life insurance policy at standard rates.”

Memory Tip

Medical Underwriting = Medical review Under consideration for Writing a policy - they review your health before writing your policy.

Why It Matters

Medical underwriting directly affects your insurance costs and coverage options, potentially resulting in higher premiums, coverage exclusions, or even denial of coverage based on your health status. Understanding this process helps you prepare for applications and explore alternatives if you have health issues.

Common Misconception

Many people think medical underwriting means automatic denial if you have any health problems. In reality, underwriters evaluate overall risk and often provide coverage with adjusted premiums or specific exclusions rather than outright denial, though coverage terms may be less favorable than for healthy applicants.

In Practice

When applying for individual health insurance before the ACA, Sarah disclosed her diabetes during medical underwriting. The insurer offered her coverage but excluded diabetes-related treatments, charged her 40% higher premiums ($480 vs. $340 monthly), and required a $5,000 deductible instead of the standard $2,500. Today, ACA-compliant plans cannot use medical underwriting to deny coverage or charge higher premiums based on health status.

Etymology

Combines 'medical' and 'underwriting,' where 'underwriting' comes from the Lloyd's of London practice of insurers literally writing their names under the risk they agreed to cover on marine insurance policies.

Common Misspellings

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Other insurance terms you should know

See Also