Underwriting (31)

Question 1

Purpose of underwriting

Answer 1

– protect against anti-selection
– ID substandard lives
– ID special terms
– rate lives fairly
– ensure mortality experience is consistent with pricing basis
– reduce over-insurance

Question 2

Types of underwriting

Answer 2

1. medical
2. lifestyle
3. financial
4. claims underwriting

Question 3

Medical underwriting sources

Answer 3

– proposal form
– doctors report
– medical examination
– specialist test

Question 4

Special terms

Answer 4

– declined
– deferred
– special terms:
* increased premium
* reduced benefit
* exclusion
– alternative policy

Question 5

Determining level of underwriting

Answer 5

– expenses
– financial significance of anti-selection
– u/w level vs anti-selection
– deter PH
– effectiveness
– regulation
– RE
– varying by age/sum

Question 6

Lower anti-selection

Answer 6

– lower sum
– no benefits in first few years
– target unsophisticated market
– limit availability
– exclude pre-existing conditions
– underwriting at claims stage
– max entry age

Question 7

Group underwriting

Answer 7

– exclusions
– free cover limit
– take-up rates
– take-over terms
– work at policy inception

Question 8

Why not use certain underwriting data?

Answer 8

– save expenses
– negligible anti-selection
– competitive
– cover amount is small
– group cover
– compulsory
– not acceptable
– legislation
– info not available