Why Insurer asks so many questions before giving you
insurance….? Well then just let me ask you… why you ask so many questions
when you go to buy a Car... Which model? What is the mileage? Do you have a red one? What about the fuel efficiency? And what happens when you go & buy a TV? How many channels it has? What is the screen size? Which company? Why the colors are so bleak? …. And what not..? hmm.
So when you ask for
Insurance on your life, the company has all the rights to access your life? Every question asked is very important & your answer to each one determines the price that you have to pay for the Insurance cover. The application form which has all the questions is assessed d this assessment is called “
Underwriting”.
The process of underwriting is not as simple as it sounds. It basically evaluating one’s life on the basis of the answer that one provides.
You are asking for a cover against the big Risk called DEATH. Right? All you do is pay for it & die… its not that easy… remember I gave that example of TV & Car , it to tell you that even, you yourself do enough risk analysis when u pay a relatively small amount for mundane entertainment stuff like TV. Insurer is covering your life for a very small amount and creating a safety net for you and your entire family. It is a big risk for insurer if they take an unhealthy life over the healthy life and so to evaluate accordingly as per the risk value, these questions help to determine the cost on the basis of risks involved. This is all but a tip of what is being done in underwriting.