In simple terms underwriting is the process whereby applicants are classified according to their degrees of insurability so that the appropriate premium may be charged and the terms offered may be reviewed.
The application process involves answering lots of questions that are designed to capture the information we need to build a clearer picture of the life to be insured and the risk factors which may increase the likelihood of them claiming.
We rely on the client giving full, accurate and honest disclosure of relevant facts on the application form. You should ensure that your client understands that withholding information, or even just forgetting something, could ultimately lead to a situation where a claim will be refused.
This information is obtained for two reasons - because of the level of cover applied for, or because of disclosures on the application form. Automatic evidence, obtained because of the sum assured, can be found in our medical limits section.
Wherever possible, where your client has disclosed information, we will make decisions based on the application form alone. Where further clarification is required we will obtain one or more of the following:
This is a short medical report that is completed by the applicant's GP based on their medical history. In order to avoid delays we will always try to request alternative evidence. A GPR is more likely to be requested where there are multiple medical problems, or where technical information is required which the client is unlikely to know.
The client undergoes a medical by a nurse or a doctor which provides us with details of their current health. These are arranged through Medicals Direct - a network of nurses and doctors across the country
A nurse will call the client to ask more questions about a medical condition the client has - this helps speed up the application process and can avoid the need for a GPR.
These include cotinine (a test to confirm a client is a non-smoker) , HIV, ECG, blood tests
If a client has a hobby such as scuba diving or mountaineering we will require further information from them.
These are required when cover levels are high, and provide us with details about the client's financial situation to gauge whether the cover levels applied for are justified. For Business Protection Cover the financial questionnaire is included in the application form.
Once the underwriters have all the information they need, one of the following decisions will be made - the adviser and client will be advised of the decision in the acceptance letter.
| Decision | What it means |
| Accept on standard terms | Client is accepted on PruProtect’s normal rate of premium. |
|---|---|
| Accept on special terms | Loading/rating Exclusion Rating and an exclusion |
| Postpone | The underwriting decision needs to be delayed - this usually happens when a client has recently been diagnosed with a condition or is currently showing symptoms of illness which are still being investigated or remain undiagnosed. |
| Decline | Cover cannot be offered because the risk is too high. |
The majority of ratings are in the form of percentage extra mortality (EM), and are a multiple of the basic premium. A rating of +50% EM will therefore be an additional 50% of the basic premium. Extra mortality is charged from +25% to +400% - above this amount the risk is considered too speculative and will be declined.
This is not appropriate for some risks which are not age related, the most common being cancer. For this risk a cash extra is charged, based on the sum assured. An extra will be charged for every £1,000 of the sum assured, expressed as an amount "per mille". These are usually temporary loadings applied to the first few years of the policy. For example, if the rating were £5 per mille for 8 years, and the sum assured were £80,000, the annual extra would be calculated as 5 x 80, then divided by 12 for the monthly extra premium (£33.33)
For serious illness and disability benefits it can be more appropriate to use an exclusion. Wherever possible we will offer full cover with an extra premium, but if the client has a pre-existing condition which has an unacceptably high chance of causing a claim we will exclude that condition. Exclusions are never used for Life Cover.
Use our BMI calculator to find out whether your client's application is likely to be accepted or declined
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PruProtect is a trading name of Prudential Health Services Limited (registered number 05933141) and Prudential is a trading name of The Prudential Assurance Company Limited (registered number 00015454). The Prudential Assurance Company Limited provides and manufactures benefits under the plan. Prudential Health Services Limited distributes and services the product and issues the documentation. Companies are registered in England and Wales. Registered offices at Laurence Pountney Hill, London EC4R OHH. All companies are authorised and regulated by the Financial Services Authority. Neither company is affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America.
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