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Usually, there is a pre-screening questionnaire that will be completed. This questionnaire contains a list of uninsurable medical conditions. The use of the pre-screening questionnaire helps eliminate applications from those who are sure to be rejected.
The application for critical illness insurance is similar to an application for life insurance however, there are more questions about the applicant's family medical history.
In situations where the applicant fails to meet all the underwriting guidelines the company may offer the insured the non-standard rate. In these cases the insurer may:
1. Add a surcharge to the regular rates to reflect the increased risk for that applicant.
2. Issue a policy which contains specific exclusions , such as pre conditions exclusion, certain illnesses or conditions can be excluded
3. Basic Plan coverage only to the applicant
When underwriting a critical illness policy, the insurer will review the following areas:
1. Family History
Hereditary factors have a strong influence on the applicant suffering certain diseases in resulting of disqualification of the applicant if one or more family members has been diagnosed or has died from a covered disease.
2. Personal Health
a) Previous instances of hypertension will be closely reviewed since there is a close relationship between hypertension and the suffering of a critical illness.
b) Height and weight
Underwriters have established guidelines as to which height and weight combination are acceptable for the issuance of the critical illness insurance policies.
c) physician's statement
d) Other reports, such as medical examinations, blood tests, urine test,etc.
e) Occupation, avocations and driving habit because these can have an impact on the incidence of critical illness occurrences.
Ex: a professional driver may be more exposed to accidental dismemberment or paralysis than a person who drives only occasionally.
3. Financial Information
The amount of coverage available under critical illness insurance can be a million dollars or more. Therefore, the insurer must determine what amount of coverage is reasonable. Many insurers will normally allow coverage up to 5-7 times of the applicant's salary.
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