Financial Underwriting

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Financial Underwriting It is the process of assessing whether the proposed sum insured and product are reasonable when considering the possible financial loss to the client. It is a critical part of the insurance process, as it helps to ensure that the insurer is not taking on too much risk. Financial underwriting empowers underwriters to effectively evaluate whether the coverage applied for makes sense within the overall context of the specific case. Financial underwriting is difficult since it involves an almost in byfinite number of situations. Any set of rules or guidelines will have a certain amount of fluctuation from the norm and should be viewed as only a beginning point or a point of reference. The purpose of financial underwriting is to: protect the insurer from financial loss, ensure that the applicant is able to afford the insurance, provide the applicant with the right amount of coverage. The role of financial underwriting in the insurance process is to: screen out high-risk applicants, design the insurance policy, set premiums. Some of the factors that financial underwriters typically consider when evaluating an applicant are: income, assets, debts, occupation, health, financial goals. The underwriter’s goal is not to determine the correct amount of coverage. The goal is to determine if the evidence provided supports the ultimate need for example the life insurance coverage requested to protect the beneficiary from hardship due to measurable future economic loss upon the death of the insured. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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