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Chapter 4
Disability Income Underwriting
The important points addressed in this lesson are:
Disability insurance underwriting generally focuses on three important factors: occupation, health history and overinsurance
The classification of occupations according to the disability hazards they represent results in occupation classes
A proposed insured's occupation class has a significant effect on the amount of disability income coverage available, the availability of favorable provisions and the premium charged
Although occupation classification may differ from insurer to insurer, occupations are generally divided into five or six categories that differ principally in their manual work content
Financial underwriting for disability insurance is concerned primarily with ensuring that the disability income insured has sufficient financial motivation to seek to return to work following a period of disability
Medical underwriting focuses on the proposed insured's health history and the likelihood that it will increase morbidity
Underwriting the impaired risk is generally accomplished through three approaches: rejection, increased premiums and/or exclusions and limitations
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