SELECTION

If on analysis the information collated shows that the individual is in good health, then he or she is likely to live as per the "pure risks" calculations. If on the contrary the individual is suffering or has suffered from a serious illness (e.g. high blood pressure) then, statistics have shown this can shorten the person's life expectancy.

Such individuals are often referred to as 'under average lives', and often the insurer will charge an extra premium to reflect the higher risk. The underwriter can choose to apply a 'debt' to the policy. This is generally used in an endowment policy where the death benefit has less importance than the maturity value. If the individual dies prior to maturity then the debt would reduce the death benefit. These debts can be either level or decreasing, depending on the individual health details.

It is generally true that most underwriters try to avoid declining to insure applicants preferring instead to defer a decision for 6 to 12 months when a more accurate selection can be made.