Life Insurance Underwriting: How It Works & What You Need to Know

The life insurance application process determines if an insurer can make you an offer for coverage—known as insurance underwriting—and this process varies from person to person. The time it takes from applying to having active life insurance coverage can vary, too.

One thing that is constant for everyone who applies through Fabric, however, is that the process begins with completing an online application. Once that's done, your application can take one of three basic paths.

Path #1: Immediate Offer

Some insurance policies, such as the one sold through Fabric by Gerber Life, have the ability to approve some or all applicants without a medical exam. Whenever possible, we'll make you an offer immediately upon submission, so you can obtain coverage right away.

Path #2: It May Not Work Out

In some instances, if you do not qualify for coverage through us, we’ll know that immediately as well. If that is the case, we'll tell you as early in the process as we can, so you don't need to submit your application for further review.

Path #3: Life Insurance Underwriting

If we can't get you an immediate answer on whether we can offer you coverage (either yea or nay), your application will be referred to our team of underwriters. As part of this review process, we may have follow-up questions, request your medical records and/or ask you to take a quick health exam.

(If you're asked to take a health exam, you'll schedule an appointment with a qualified examiner to come to your home or office around your schedule, at no cost to you. Here’s more on what to expect from the life insurance health exam.)

What Does Life Insurance Underwriting Entail?

Life insurance underwriting is generally based on risk factors like your health. That’s because it’s correlated to your likelihood to, you know, pass away.

Enter the underwriter: the person responsible for determining whether you get insured and how much it’ll cost you. Although you’ll likely never speak with your underwriter, he or she is probably responsible for processing about 20 to 30 applications daily.

Most life insurance policies are medically underwritten. That means your medical history will help determine whether the insurance company can offer you a policy, and for how much. (As a result, not everyone will get the same pricing.)

Contrary to what you might think, underwriters aren't trying to deny you coverage; they're actually trying to get you the right coverage and pricing based on your risk levels.

“The underwriter is there to help you,” says Coleen Moser, associate director at ESMI Underwriting. She has 38 years of experience and underwrites policies for Fabric. “They want to make sure they’re placing you with the best possible coverage.”

Step by step, here’s how they make those decisions.

Step 1: Fill Out an Application

While some people still apply for life insurance directly through a live agent, companies like Fabric let you apply totally online. That means you don’t have to set up meetings with an agent in person, or potentially get upsold on whole life insurance policies you may not even need.

The hearing-about-the-insurance-and-getting-set-up processes are different depending on whether or not you go with an agent. But the underwriting process (determining your risk levels) is actually quite similar.

When you apply for life insurance online, you’ll fill out an application requesting information like:

• Age, height and weight

• Your and your immediate family’s medical histories

• Employment information, annual income and net worth

• Lifestyle habits (tobacco use, alcohol consumption, hobbies)

All of these factors go into determining your risk of passing away. While your employment may seem like an outlier, it can help an underwriter understand if you’re in a high-stress or high-risk job, like a doctor or firefighter. Meanwhile, underwriters use your annual income and net worth to help determine the amount of coverage you’re eligible for.

Step 2: See If You Can Skip the Line

Traditionally speaking, underwriting insurance involves getting a bunch of documentation to verify the information on your application, asking you follow-up questions and so on.

But a new breed of companies, like Fabric, are trying to make this process quicker, easier and more seamless. So, whenever possible, Fabric will approve you instantly, using an algorithm to help understand your risk profile; in these cases, an underwriter doesn’t even need to review the application.

This algorithm is based on information available in various databases. For example, with your permission, prescription databases can be used to find out what medications you’ve been prescribed or motor vehicle records to learn of any driving violations.

In other cases, you won’t be able to “skip the line,” especially if the underwriters have follow-up questions about your application. So if you aren’t able to get “accelerated approval," then your Fabric application will go to an underwriter to make a final decision.

Step 3: Gather All Necessary Medical Info

“First and foremost, the underwriter is going to look at the overall health of the applicant,” says Moser.

Unsurprisingly (for people whose job it is to assess others’ risk of dying…) underwriters need to fully understand your medical background because it has the greatest impact on your risk classification.

They have a few tools in their box to help them do just that. They might ask you for any of these things in order to assess your application—or they might not need any of them at all.

Health Exam

This is a physical exam at no cost to you. Many companies that offer insurance, including Fabric, will send a qualified medical examiner to your home or office, around your schedule. Fabric works with a company called American Para Professional Systems (APPS) that even works odd hours, like nights and weekends. That way, you can choose a time that’s genuinely convenient.

(Even more convenient — some life insurance policies can let you skip the health exam altogether.)

The examiner will ask questions about your medical history. They’ll likely take height and weight measurements, and a blood and urine sample. They do this because a simple blood test can detect things like heart disease, stroke and diabetes, and the urine sample reveals things like drug use.

All information obtained during the exam is strictly confidential and your test results will be sent only to the underwriting department to be used in the underwriting process.

Once you’ve completed your health exam, it takes about five to seven business days for your results to come in and be reviewed by the underwriting team. You can usually request a copy of your health exam results for your own records, too!

Here's a deep dive on life insurance health exams.

Attending Physician Statement (APS)

This is a summary of your medical history from your doctor—basically, it’s like asking for your medical records.

An attending physician statement, or APS, isn’t always required, but an underwriter might request it if there’s something in your medical history that your doctor should speak to (for example, diabetes, hepatitis, Crohn’s disease or something else). If something comes up during the health exam, an underwriter might ask your doctor to explain a treatment you’re undergoing or any medication that you’re on.

Since the underwriter is requesting information from your physician, this part of the process can take some time. The APS is only available with your permission, so you’ll need to sign authorization forms. Make sure to take care of this quickly to keep things moving. Plus, your doctor is probably busy, so giving their office a call might help speed things along.

Medical Information Bureau (MIB) Check

The MIB is a trade group for the insurance industry, and it manages a database of applicant information. That includes things like medical data, any current coverage and reasons other carriers may have declined an applicant. Essentially, it’s insurers working together to ensure applicant data is as accurate as possible.

“The majority of applicants aren't intentionally withholding information,” says Moser. “They either don't understand how it's relevant, or sometimes they just flat-out forget.” The MIB helps underwriters catch any of these oversights and can also help stave off fraud.

Prescription Review

The underwriter may also request to review all your prescriptions for the past five to seven years. This step isn’t always needed, but underwriters may request the information to help supplement your medical data.

Insurance companies can access prescription history data from pharmacy benefit managers, the middlemen between medical insurers and drugstores. No action is required from you at this step: Your signature on the original life insurance application gives your consent to have underwriters check this data.

Involving a Medical Director

For applications with more complicated medical information, an underwriter may meet with an in-house or consultant medical director. This person typically has an MD (doctorate in medicine) or DO (doctorate in osteopathic medicine) and is licensed to practice medicine in the United States.

The medical director consults on diagnoses for which the insurance carrier may not have clear-cut guidelines to help them assess risk. For example, if an applicant has an obscure cancer diagnosis, the medical director can help the underwriter understand what that means about the person’s risk profile.

Step 4: Underwriter Reviews Your Driving History and Financial Info

Similar to your health history, your driving history is correlated with how risky it’d be to cover you for life insurance.

In the course of underwriting insurance for you, the underwriter may receive your motor vehicle report (MVR) for the past five to seven years. That will include things like traffic violations, vehicular crimes, accident reports, driving record points and DUI convictions. This is relevant because your driving history is an indication of your general risk.

A DUI won’t necessarily cause you to be denied for coverage, but it can impact your rates, especially if the conviction is more recent. Moving violations—speeding, failure to wear a seatbelt, tailgating and more—can also impact your rates. Parking tickets and accidents that aren’t your fault, however, don’t affect your life insurance rates at all.

Underwriters may also look at your financial details, such as your credit or debt profile. This is especially true for companies offering the potential for you to get covered instantly, without underwriter review. If they're looking for ways to approve you on the spot, they may look at and rely more heavily on non-medical information, such as public records, motor vehicle records and credit attributes because they can also indicate a higher risk of mortality.

Step 5: They’ll Compare Your Profile Against Actuarial Tables

To help guide their decision, underwriters also use actuarial tables. These are tables that predict the likelihood of mortality for specific ages and genders. For instance, a 25-year-old woman generally has a lower mortality likelihood than a 50-year-old man. Of course, the situation can be more complicated if you’re non-binary and/or transgender and the specifics will vary by insurance carrier.

Actuarial tables might also classify people into different risk groups based on body mass index (BMI). For instance, even if you don’t currently have health problems related to obesity, a higher BMI might indicate the future likelihood of things like high cholesterol, high blood pressure and diabetes.

These tables are guidelines, so they’re used in concert with all of the other factors underwriters consider.

Step 6: Follow up Phone Call

Occasionally, there might be a discrepancy between the information that the underwriter has gathered and your original life insurance application. When this happens, you might need to hop on the phone to answer any outstanding questions (or follow up via email, depending on the provider).

The phone call isn’t something to be nervous about, though. It can help you explain what you’re doing to improve a known health condition. For instance, if you’re diabetic and recently started exercising and are on a weight loss program, the underwriter might be able to use that information to lower the cost of your policy.

Step 7: Receive a Final Underwriting Decision

If your application needs a lot of additional information, the underwriting process could take a month or so. That’s especially true if you need to spend time waiting for your doctor to get back to the underwriting team to answer questions.

After looking at all this info, the underwriter makes a final decision about whether you can be approved for coverage and how much it’ll cost.

Moser says, “The underwriter wants to help the applicant. Even if they can’t offer you the rate you applied for, they want to offer you something.”

Life Insurance Underwriting: The Bottom Line

The underwriting process is there to help ensure an appropriate amount of coverage for your family’s financial situation. All of the steps and information-gathering ensure that happens—in order to help you provide for your family.

Fabric exists to help young families master their money. Our articles abide by strict editorial standards.

Information provided is general and educational in nature, is not financial advice, and all products or services discussed may not be offered by Fabric by Gerber Life  (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Consult an attorney or tax advisor regarding your specific legal or tax situation. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. The views and opinions of third-party content providers are solely those of the author and not Fabric by Gerber Life.