Underwriting & Risk – Life and Health Insurance License Exam

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Underwriting evaluates and selects risks to ensure that applicants are charged a premium commensurate with their level of risk, keeping the insurer financially sound.

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Insurable interest means the policyholder must face a financial loss or hardship if the insured event occurs; it must exist at the time the policy is issued.

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The application itself is the primary source; it contains the applicant's personal, medical, and financial information used to assess risk.

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A field underwriter is the insurance agent who performs the initial risk screening by gathering accurate application information and observing the applicant's apparent health and lifestyle.

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A rated (substandard) policy is issued to an applicant who presents higher-than-average risk; it typically carries a higher premium or reduced benefits to compensate for the elevated risk.