Overview of Medical Underwriting

Medical underwriting is a process that insurance companies go through when they are evaluating an individual for insurance coverage. This process involves checking the health status of the individual to determine if they should be approved for life or medical insurance. Here are a few things to consider about medical underwriting.

Medical Underwriting

Every insurance company uses medical underwriting in order to determine how likely an individual is to file a claim in the future. By looking at the health of the individual, the insurance company can make assumptions as to how much they will have to pay for the individuals medical care in the future. The insurance company can try to determine approximately how much longer this individual will live. By doing this, the insurance company can determine how much to charge for premiums and how much of a death benefit the individual will be eligible to receive.

Keep Premiums Low

The primary objective for the insurance companies in medical underwriting is to try to keep premiums low. By getting more information about the health of an individual, an insurance company can make a more accurate estimate about the costs that will be incurred for medical expenses in the future. Without medical underwriting, an individual could wait until they started to get sick to purchase medical insurance. They could also wait until they get older to purchase life insurance. Medical underwriting is used to determine if an individual is sick or has some type of the disease that would cause the insurance company to have to pay medical expenses quickly. If this happened enough, the insurance company would go out of business because it would start paying insurance claims immediately after an individual started getting coverage. Not enough people would be paying into the insurance to support all of the medical bills.


Even though the idea behind medical underwriting is to save the customer money, it has met with some arguments from consumer groups. For example, many people argue that insurance companies simply do not want to take on pre-existing conditions and overcharge for individuals who have these conditions. Because of this, certain states have outlawed the practice of medical underwriting with life insurance or medical insurance policies.

Studies have shown that the states where underwriting has been removed tend to have the highest insurance premiums in the country. Insurance companies have to make up for their lack of knowledge by charging more for the insurance coverage. This way, the insurance company will make sure to protect themselves financially by charging enough money. The lack of underwriting brings forth a new debate about affordable insurance.

An insurance company will charge higher premiums in order to provide coverage for an individual they know nothing about, making insurance unaffordable for many.

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