What is the primary role of underwriters in life and health insurance?

• A. To market and sell policies.
• B. To legislate policy terms.
• C. To set state insurance rates.
• D. To assess and classify risk; determine acceptance or pricing.

Answer: (D)

Underwriting is about evaluating how risky a proposed insured person is and deciding whether to insure them and at what price. The underwriter reviews factors like age, health history, family history, smoking or other lifestyle risks, and any medical test results. Using established guidelines, they place the applicant into a risk category and determine if coverage is acceptable, if exclusions or riders are needed, or if the applicant should be denied, and what premium should be charged if accepted. This risk assessment and pricing decision is what protects the insurer from taking on too much or too uncertain risk.

Marketing and selling policies are handled by agents or producers, not underwriters. Setting policy terms is governed by law and company policy, while rates for broader markets are determined through actuarial analysis and regulatory processes, with underwriters applying those guidelines to individual cases.