How to Underwrite Insurance

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Underwriting insurance is done so that the insurance company can make a profit. Learn to underwrite insurance with help from a member of the California Department of Insurance Curriculum Board and insurance professional in this free video clip.

Part of the Video Series: Life Insurance & More
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Video Transcript

Hi, I'm Tony Steuer, the Life Insurance Sage, and this is my tip on how insurance is underwritten. Insurance is underwritten by an insurance company in order for the insurance company to make a profit. The goal of a person purchasing life insurance is to insure against a risk. The goal of an insurance company is to make a profit. So, when they underwrite a policy, they're taking a look at whether or not you will be a profitable risk. They take a look at whether or not, when you're applying for life insurance for example, you have a shortened life expectancy. If you have a shortened life expectancy, it's more likely that they're going to have to pay a benefit sooner. If you're applying for health insurance, and you have a series of health conditions, it's most likely they're going to have to pay claims for your health insurance. When you're taking a look at insurance, keep in mind that it's nothing personal, that to the insurance companies, it's a mathematical equation. They're taking a look at whether they can be profitable or not when underwriting or offering a policy. I'm Tony Steuer, Life Insurance Sage, and that was my tip on how to underwrite insurance. Thank you for watching.

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