UNDERWRITERS
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This section has up to now concentrated on the
"pure risk" of an individual dying at a given age. Although
this allows you to calculate a premium it does not take account of the
"real risk" which emanates from their state of health.
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The underwriter's job is underwriter's job is to
analyse medical evidence relating to the individual(s) applying to be
insured. This evidence will include both the medical history and present
condition of the person(s) who are to be insured.
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The information is obtained by asking the individual
questions by the means of the application form, and if necessary writing
to the individual's GP. The latter is covered by legislation, which
allows the individual to see a copy of the report completed by his
doctor. This legislation "Access to Medical Records Act 1988",
allows for copies but does not set a maximum cost for the provision.
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The underwrite relies heavily on the truthfulness of
the answers given by the applicant; the answers given must be true to
the best knowledge and belief of the applicant.
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This process of analysis is often known as selection,
indeed an untruthful applicant is often said to be selecting against the
office.
- The key difference between the life
underwriter and the general insurance underwriter is that the latter has
the ability not to invite renewal, but the life underwriter has to make
a decision which will remain for the term of the plan be that 1 or 25
years.
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