What is underwriting?
When we’re applying for an insurance policy, we will normally go through a series of health questionnaire as part of the underwriting process. But what is underwriting? Is there a simplified version?
People always say the best time to purchase medical insurance is when you are young. That’s because the younger your age, the less likely you are to have any serious health issues or to have been diagnosed with any pre-existing medical conditions, and the lower the insurance premiums you have to pay. As people grow older, there may be a higher probability of: (a) health risks and (b) developing a health problem that requires hospitalisation and surgery. In such cases, even if such person(s) eventually make a full recovery, insurance companies may consider such person(s) having pre-existing condition(s), and would have grounds for charging relevant persons with additional premiums, applying exclusions or even rejecting such applications altogether. That’s why generally, every insurance policy issuance must undergo underwriting process.
Applicant needs to go through a series of health questions, so that the insurance company can better understand the applicant’s health condition.
The insurance company assesses the proposed life insured’s health condition based on the answers of the health questions.
The insurance company may follow up by requesting additional information or requiring the applicant to undergo a health examination before reaching a decision. The applicant will receive correspondence if there is other arrangement.
| The applicant accepts the proposed arrangement if any. See below for details about the possible underwriting outcomes. |
Application approved.
An additional premium is required due to common reasons included but not limited to hypertension, hyperlipidaemia and overweight. This means the insurance company would only approve the application if the applicant agrees to pay a higher-than-standard premium.
Additional exclusions applied, ie no benefits will be payable for health problems arising from or in relation to certain specified conditions, diseases or organs.
Application is postponed. That means the applicant’s physical condition does not yet meet the insurance company’s underwriting requirements. In that case, the applicant can submit new information on his health condition at a later date and request re-assessment.
Application is declined.
The questionnaires for full underwriting tend to be long and detailed. Since many applicants need to acquire medical protection for themselves or the intended life insured quickly, insurance companies, such as HSBC Life (International) Limited (“HSBC Life”), may consider to accommodate the applicants by providing simplified underwriting (subject to relevant terms and criteria which may be imposed by HSBC Life) if they apply for a Voluntary Health Insurance Scheme.
The purpose of acquiring medical insurance is to ensure you would have the financial support you need in case you develop a serious illness. And applications take time to process. That’s why “I don’t need to buy medical insurance while I’m healthy” is very much a misconception that we need to change.
Disclaimer: This is a very brief document intended for reference only. Notwithstanding anything stated herein, HSBC Life shall have the absolute right (and discretion) to determine, amend and update its underwriting policy, procedures and requirements from time to time.
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Disclaimer
The information contained in this article is for general reference only and is not intended to constitute a recommendation or advice to any person or to be the basis for any financial decision. No person should act on any information in the article without seeking professional advice.
The information contained in this article does not constitute an offer for the purchase or sale of any banking or insurance products or services. Products and services are subject to individual needs. Contact your financial planner to review your financial needs and risk acceptance level. This article should not be reproduced or further distributed to any person or entity, whether in whole or in part, for any purpose.
HSBC Life has based this article on information obtained from sources it believes to be reliable, but which it has not independently verified. HSBC Life and HSBC makes no guarantees, representations or warranties and accepts no responsibility or liability as to its accuracy or completeness. Information in this article is subject to change without notice. HSBC Life (International) Limited, Macau Branch ("the Company") is authorised and regulated by the Autoridade Monetária de Macau ("AMCM") to carry on long-term insurance business in the Macau Special Administrative Region.
In respect of an eligible dispute (as defined in the admissibility scope in the Mediation Scheme for Financial Consumption Disputes) arising between HSBC Life (International) Limited ("HSBC Life") and you out of the selling process or processing of the related transaction, HSBC Life is required to enter into a Financial Consumption Dispute Mediation process with you; however, any dispute over the contractual terms of the above insurance product should be resolved between the Company and you directly.
All the information in the article is updated as of December 2022
Issued by the HSBC Life (International) Limited, Macau Branch (Incorporated in Bermuda with limited liability)
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