Underwriting Individual Health Insurance

Underwriting procedures for individual health insurance are different from the standards for underwriting other policies. Individual health insurance policies are written for one individual, a couple or a family, based on assessment of their personal coverage influencing health risks.

Underwriting is the process of determining the cost of insuring an applicant based on factors like gender, age, Body Mass Index, health history, tobacco use and other lifestyle factors. The underwriting process for any health insurance policy must be based on actuarial data, or health statistics. Underwriters use specific guidelines to determine how much it will cost to provide coverage to an individual based on these risk factors.

Underwriting Process

An individual insurance application is more than just another bureaucratic form. An insurance application is a legal document that becomes the basis for underwriting an insurance policy. After you complete the application, an underwriter will review the data you provided to decide how much risk the company would assume by issuing you an insurance policy. If you have a complicated health history or other risk factors, such as a high BMI or a smoking habit, the risk of providing coverage is greater, and your premiums may be higher as a result.

Underwriters apply more scrutiny to individual health insurance applications than to other applications. The risk involved with insuring a single person is greater than the risk of insuring a large number of people. When an underwriter reviews an individual application, he or she must take every potential health issue into account.

The guidelines for underwriting health insurance policies vary from one insurance company to another. These guidelines include information such as height and weight standards, medical conditions or lifestyle factors that are not covered by the insurance company and the health conditions for which an application could be automatically denied. Most insurance companies impose restrictions on covering pre-existing health conditions, such as requiring that the policyholder wait for a certain period of time before treatment for the condition will be covered.

Applying for Insurance

When you complete an individual insurance application, it's important to provide accurate, honest information. During the underwriting process, an underwriter may contact your health care providers to verify specific information or request copies of your medical records. If you have a serious health condition and you do not disclose it on the application, coverage for this condition may be denied, and the policy may be voided.

Under certain circumstances, an insurance company may automatically deny an application for individual health insurance. Although these circumstances vary from one insurer to another, they may include medical conditions that can't be explained, cancer under treatment, hepatitis, multiple sclerosis, muscular dystrophy or other serious conditions. If you are turned down for coverage by at least one insurance provider, you may qualify for a high risk individual health insurance plan. Most states offer these plans to medically uninsurable individuals.

Underwriting individual health insurance is a standardized process to some extent, but each company may set its own guidelines. Because underwriting standards vary from one insurer to another, the cost of individual health insurance premiums may also vary. Compare quotes from several insurance companies to find a provider that offers the coverage you need at reasonable rates.

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