InsuranceFinancial Glossary
Underwriting
Definition
The process by which an insurer evaluates the risk of insuring a person or entity and decides whether to accept, reject, or offer modified terms (higher premium, exclusions, or waiting periods). Underwriting in health insurance involves assessing age, medical history, lifestyle, occupation, and family health history.
Why It Matters
Underwriting determines your premium and policy terms. A 40-year-old with well-controlled diabetes may be offered a policy with loading (higher premium) and a 4-year PED waiting period. A perfectly healthy 25-year-old gets standard rates. Being honest during underwriting protects your claims later — undisclosed conditions can void your entire policy.