The Underwriting Process For Critical Illness Insurance


The Underwriting Process For Critical Illness Insurance

The applicant must pass a rigorous underwriting process to obtain coverage formally. If the underwriter assesses the applicant as a high-risk individual, the insurance premium and exclusions may be increased, or the applicant may be rejected. However, the applicant should not conceal any information during underwriting, as it may result in a situation of claim denial, causing more harm than good.

What Is "Underwriting"?

I believe everyone is familiar with the process of taking exams — teachers first set a series of standardized questions and then give the assessment results of “Pass” or “Fail” based on the examinees’ answers.

“Underwriting” is like an exam. Underwriters will classify policyholders into two groups, “General Risk” and “High Risk,” based on the answers in the Health Declaration Form, and use this as the basis for policy approval.

Why Is Underwriting Necessary When Applying for Critical Illness Insurance?

Underwriting is necessary for applying for any insurance product, including Critical Illness Insurance.

The main purpose of underwriting is to understand the health status of each insured person more accurately, thereby helping the insurance company to identify high-risk individuals early and avoid policies that exceed the company’s risk-bearing capacity.

As high-risk individuals with potential health risks are generally more prone to serious illnesses, leading to an increase in overall claims, a rigorous underwriting process not only helps insurance companies operate stably, but also protects other policyholders from paying premiums higher than the actual value to share the risk of high-risk individuals.

General Underwriting Process For Critical Illness Insurance

Applying Through An Intermediary

If you apply for insurance through a traditional insurance company, there is usually an insurance intermediary responsible for following up the entire underwriting process.

The insurance intermediary will first ask the applicant about their health condition personally. If necessary, they may ask the applicant to undergo a physical examination and provide more supplementary information. After that, the intermediary will submit the applicant’s answers to the “Underwriting Department” and notify the applicant when there are results.

As underwriters need to read and process a large number of written documents, underwriting takes longer, ranging from several days to several weeks, depending on the review progress of each insurance company.

Online Application

If you choose to apply for online insurance, the process is generally simpler and more direct.

Taking Bowtie as an example, applicants do not need to show up in person and can simply answer mainly multiple-choice questions online to complete the health declaration as early as 10 to 15 minutes. In addition, Bowtie uses an intelligent underwriting system, which not only effectively saves a lot of cumbersome procedures but also has much better speed and accuracy in risk assessment than manual underwriting.

Unless the applicant’s health condition is complicated, the underwriting can be directly passed in a short time (as fast as 10 minutes). Bowtie’s underwriters will follow up on the situation personally when necessary, requesting additional medical documents from the applicant to determine whether to approve the policy.

General Underwriting Questions Of Critical Illness Insurance

1. Gender & Age

Age and gender are the most direct factors affecting individual health. For example, the probability of cardiovascular disease in the elderly is higher than that of young people, and middle-aged women have a higher risk of cancer than men of the same age.

2. Current or Past Medical History

Regardless of the severity of the illness or whether it has been completely cured, the applicant needs to list all medical records in detail during underwriting and submit them to the underwriter for a comprehensive risk assessment.

3. Inherited Diseases/ Long-term Illnesses

Many diseases may not directly threaten life, but they may cause a series of complications that have a profound impact on the long-term health of patients. Therefore, insurance companies will require applicants to truthfully disclose existing or inherited diseases to make a more comprehensive risk assessment.

4. Mental Health

As Critical Illness Insurance may not cover medical conditions caused by certain psychological or mental illnesses, the applicant must carefully disclose their mental condition during underwriting to avoid disputes when making claims in the future.

5. Recovery Status/ Treatment Progress (If Applicable)

If the applicant is currently suffering from a certain illness or undergoing certain medical procedures, they should provide medical records in a comprehensive and honest manner during underwriting, to enable the insurance company to have a deeper understanding of their health condition.

6. Smoking Habits

Several clinical studies have shown that smoking increases the incidence of coronary heart disease, stroke, cancer, and other diseases. Therefore, many insurance companies charge higher premiums for smokers.

What Happens After Underwriting?

Underwriting ResultsDetails
Application ApprovedAfter successfully passing the underwriting, the insurance company will arrange credit card payment for the premium deduction, and the coverage will be effective on the same day.
“Loading” AddedIf the applicant is deemed to have a higher health risk, he/ she may need to pay an Extra Premium to be insured.
Additional “Exclusions” AddedThe insurance company accepts the applicant’s application on the premise of Not Covering Certain Serious Illnesses.
Deferred ProcessingPending until the applicant’s physical condition improves, such as previously contracted COVID-19.
DeniedThe applicant will not be insured.

The most important thing for applying for insurance is to be “Honest”. Do not deliberately conceal information for fear of being denied or being charged higher premiums. Once a false statement is discovered, the insurance company has the right to cancel the policy without any compensation.

Apply when you are healthy!

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By clicking “Apply Now”, you can try Bowtie’s Underwriting Process without leaving any personal information:

  • Understand whether you or your family members can be successfully insured
  • Understand the actual premium
  • Understand the premium for the next 5 years as a reference

Don’t worry, even if you complete the entire underwriting process, we will not charge you until you confirm the application!

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Want to learn more about the underwriting process for Critical Illness Insurance? Please check out our 5-minute guide.
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