What an underwriter actually looks at depends on the line of business, and the differences are larger than the similarities. Life and disability underwriting is dominated by mortality and morbidity risk: age, health history, current conditions and medications, family history for certain conditions, tobacco use, occupation, hazardous avocations, driving record, and, for larger amounts, financial justification for the coverage requested. Property underwriting looks at the building, its age, construction, roof, systems, distance to a fire service, exposure to wind, flood or wildfire, and the claims history attached to both the property and the applicant. Auto underwriting looks at driving record, vehicle, use and, in many states, credit-based insurance scores.
The evidence for medical underwriting is more varied than an applicant usually expects, and NAIC's consumer buyer's guide describes the range plainly: depending on the type of policy, "the insurer may require you to see a doctor, answer health-related questions, or have a medical professional come to your home or office to assess your health." Insurers also draw on prescription histories, motor vehicle records, and, with the applicant's authorization, records from treating physicians. The guide also states the trade-off between evidence and price directly: "Usually a policy that doesn't require detailed health information will cost more and provide less coverage than one that does." That is the whole economics of guaranteed-issue and simplified-issue products in one sentence. An insurer that cannot distinguish a healthy applicant from an unhealthy one has to price for the mix, which means the healthy applicant subsidizes the rest.
Underwriting is switched off in several markets, and knowing which ones is more useful than knowing how underwriting works. In the individual health insurance market the Affordable Care Act requires insurers to sell to anyone regardless of health history, so there is no medical underwriting at all. Employer group life and group disability coverage is typically issued without individual medical underwriting up to a stated guaranteed-issue amount, with evidence of insurability required only above it or for late enrollees. Medicare supplement coverage has its own one-time window during which an insurer must sell without regard to health. Outside those regimes, and for individually purchased life, disability and long-term care coverage, underwriting is the norm and health history is decisive.
Accuracy on the application has a specific legal consequence, and it runs on a clock. NAIC's buyer's guide puts the practical warning simply: "It's important to tell the truth on the application. The insurance company will check your answers so review the application before you sign. If the insurance company discovers false statements on your application after it issues your policy, it could reduce or cancel your coverage." The clock comes from state standard-provision statutes, which require life policies to contain an incontestability clause. New York's, as an example, requires an individual life insurance policy to contain a provision that it is incontestable after being in force during the life of the insured for two years from its date of issue (Insurance Law section 3203(a)(3)). Inside that window a material misrepresentation can support a rescission or a reduction. Outside it the insurer's grounds narrow, though not to nothing: New York's own regulator notes that a number of cases have recognized exceptions to the provision, so the answer in any given case turns on the facts. Requirements are set state by state, so both the length of the window and the grounds are worth checking locally.
A last point on how underwriting decisions land in practice. An applicant who receives a rated offer or a decline is not stuck with it. Insurers weight the same facts differently, particularly for conditions that are well controlled, so the same medical history can produce materially different classifications at different companies. Improving a modifiable factor and asking for a reconsideration is also a normal part of the process on many life contracts.
