Underwriting Guidelines for Health Insurance


Health insurance isn't a wild bet for insurance companies. The underwriter wants to make certain that they don't take unwarranted risks with the company's money. In order to do that, she uses statistical information about various health conditions and the medical history of the people that apply for insurance. The underwriter bases her decision on specific statistics of the probability of a claim. These are the underwriting guidelines for health insurance.


The underwriting guidelines help the insurance company maintain a profitable business and reduce the number of claims. If someone has a condition that requires continuous medical treatment, the chances of the insurance company accepting this person are slim. The company understands that the premium the applicant pays is not enough to cover the cost of the claims.


Many people complain you can't get health insurance when you need it. That is true. You pay premiums based on the potential cost to the company. These require that some people be healthy to offset the cost of those that have claims. This way, for a small amount of money, you receive coverage in the event of a large claim. If they allowed everyone with health conditions to purchase insurance, healthy people would never buy it until they needed it. This defeats the concept of insurance.


Sometimes the health insurance company agrees to accept people on the border of their underwriting guidelines. In these cases, the underwriter rates the policy. A policy rating is an increase in premiums the insured pays for the coverage. There are specific guidelines on the ratings also. A person with a condition that hasn't needed medical attention for years might pay extra. After several years of good health, the insured can ask that the company take a second look at his health condition and remove the rating.


The insurance company checks every type of moral risk the potential client has. If you have a bad credit rating or filed bankruptcy, that's a potential decline from the insurance company. The company normally judges that financial problems eventually take their toll on the health of the individual. Numerous speeding tickets, a DWI, drug use and abuse of prescription drugs are reasons for rejection. At one time, if you lived with someone of a different sex and were not related, the company declined the policy based on moral turpitude. Today, the insurance company covers domestic partnerships as part of normal business.


Certain conditions that cause rejection include cancer if you've had a tumor within the previous four years, diabetes, cystic fibrosis, Crohn's disease, a recent heart attack and epilepsy. There are many others on the list of uninsurable diseases (see References).


Your size makes a difference. Height-to-weight ratios affect your rating (see References). Someone who is too heavy for their height has a bigger chance of being negatively effected compared with someone who is too light for their height. The company bases its decision on the body mass index of the individual. If the individual scores 18.5 to 24 on the index, he is considered within the healthy range and is accepted. If the BMI is 25 to 29.5, there's normally a 25 percent rating because the person is overweight. Those with a BMI of 30 to 39.5 receive a rating as high as 50 percent and are considered obese. A BMI of 40 or more classifies the person as morbidly obese and normally unacceptable for coverage.

Dangerous Avocations and Vocations

People with a dangerous job or sport are often declined coverage or have to pay more for insurance. Skydiving, parachute-jumping and race car driving are examples of sports in which participants pay more for premiums.

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