Underwriting Santa

Situation: Typically, this monthly publication focuses on the technical side of life insurance, however,
this month we are going to take our sleigh down a slightly different trail. In celebration of the holiday
season, we thought it would be fun to write about Santa Claus. If anything were to happen to him
without a life insurance policy in place, it’s reasonable to assume that it might be difficult for Mrs. Claus
to keep the toy manufacturing empire at the North Pole open. So for our final message of the year, we
are going to give our readers a little peek behind the scenes of the factors a carrier might consider when
underwriting jolly old Saint Nicholas for key person coverage.

Solution: Underwriters look at several different factors including: lifestyle, medical records, occupation, hobbies, driving records, and financial history to determine an insured’s rate classification. Basically, an underwriter’s review of a file can be divided into two broad categories. The first category includes a health and safety assessment, which is typically referred to as a medical assessment. The other category is a financial assessment. A favorable medical rating is an important first step to getting a case issued, but it can still be declined during the underwriting process by failing to meet the financial underwriting parameters established by the carrier reviewing the case.

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