On what basis do insurers grant life insurance? Can they also refuse to insure?
Akash Chopra, Delhi
Once the prospective buyer of life insurance policy fills up the proposal, the documents go to the underwriter of the insurance company for scrutiny and acceptance of risk. The underwriter examines the proposal in the light of declarations made with respect to his health condition, age, income, tenure of the policy, amount of sum assured and many other factors.
Generally, proposers within a specific age bracket are not required to undergo any medical examination. However, while scrutinising the proposal, if the underwriter comes across a doubtful medical condition, he may ask the proposer to undergo specific medical tests before accepting the proposal.
The underwriting that takes place after taking into account the results of the tests is generally known as medical underwriting. Based on the medical reports and other inputs, the underwriters will decide whether to accept the proposal at normal rates or to load the premium to a certain extent or to deny the proposal itself.
