MEDICAL UNDERWRITING Meaning and
Definition
-
Medical underwriting is the process used by insurance companies to assess an applicant's health status and medical history before providing coverage. This underwriting technique is commonly employed for health, life, or disability insurance policies. The main objective of medical underwriting is to evaluate the insurability and risk profile of an individual seeking insurance, which helps determine the premium rates and coverage terms offered.
During medical underwriting, insurers analyze various factors related to an applicant's health, such as pre-existing medical conditions, past surgeries, medications, family medical history, lifestyle choices, and overall health status. This information is typically gathered through the completion of a medical questionnaire or examination, and sometimes by requiring the applicant to undergo specific medical tests or submit health records.
Based on the information obtained, insurers determine the level of risk an individual presents. If an applicant is deemed low-risk, meaning they have no significant health issues or are in good overall health, they are more likely to receive coverage at standard premium rates. However, if an individual is considered high-risk due to existing health conditions or risky behaviors, they may face higher premiums, exclusions, or even denial of coverage.
Medical underwriting aims to ensure that insurance companies have a clear understanding of the potential risks associated with insuring an individual. By analyzing medical information, insurers can fairly assess an individual's health and establish appropriate coverage terms and rates. This process helps to maintain the financial stability and sustainability of insurance providers while protecting individuals from potential financial hardship caused by medical expenses.
Etymology of MEDICAL UNDERWRITING
The term "medical underwriting" is comprised of two main components: "medical" and "underwriting".
1. Medical:
The word "medical" is derived from the Latin term "medicus" which means "of or belonging to medicine" or "physician". The Latin term originates from the Greek word "iatros" which also means "physician" or "healer". Over time, "medicus" evolved into "medicinalis" in Medieval Latin, and then into "medical" in English.
2. Underwriting:
The term "underwriting" has its roots in the insurance industry. It comes from the practice of writing one's signature or name "under" the text of an insurance policy to indicate acceptance and assumption of risk. The practice of underwriting insurance policies dates back to the late 17th century, and the term has been used in this context since then.
