Life insurance underwriting isn’t exactly cocktail party conversation. Most people don’t give it a second thought until they’re deep in the application process, when questions start piling up, forms start flying, and the process can feel a bit like being on trial.
But underwriting is where the real magic happens. It’s the process that determines whether coverage is offered, what it will cost, and under what terms. And for high-net-worth individuals and business owners in particular, understanding the basics of underwriting, and having someone in your corner to navigate it, is the key to getting the right policy at the right price.
The Two Sides of Underwriting: Medical and Financial
At its core, life insurance underwriting evaluates two major categories: your health and your finances.
1. Medical Underwriting
This is the part most people are familiar with. Carriers want to understand your overall health and life expectancy. That means reviewing:
- Medical records
- Lab results (blood and urine samples)
- Prescription drug history
- Your build (height/weight)
- Lifestyle factors (smoking, alcohol, hobbies like scuba diving or aviation)
- Family history
In some cases, especially for larger face amounts, carriers may request an attending physician statement (APS) or a paramedical exam. The goal here is risk assessment: the healthier you are, the better the offer.
But what’s important to note is that no two carriers assess risk the same way. One carrier may rate up a client for elevated cholesterol, while another takes a more nuanced view if that client is under a physician’s care and compliant with treatment. That’s where the value of independence comes in (more on that shortly).
2. Financial Underwriting
This part tends to catch clients off guard, especially business owners and high-income individuals.
Financial underwriting is how a carrier ensures the amount of insurance being requested is both justified and appropriate. They’ll review:
- Income and net worth
- Business holdings or equity
- Outstanding liabilities
- Estate tax exposure
- Business succession plans (for buy-sell or key person coverage)
- Recent large transactions (e.g., liquidity events or asset sales)
The carrier is essentially confirming that the face amount requested aligns with the financial need or planning objective. For example, an executive earning $1M per year requesting a $25M policy might raise questions unless there’s clear estate or business planning rationale.
Again, different carriers have different appetites. Some are more aggressive in the business insurance space; others are more conservative on estate planning cases. Having someone who knows the landscape makes a measurable difference.
The Benefit of Working with an Independent Broker
This is where independence is more than a talking point, it’s a strategic advantage.
Captive agents (those tied to one carrier) have a single set of underwriting guidelines, a single playbook, and a single pricing model. If your health history or financials don’t align with that carrier’s preferences, you’re out of luck…or stuck with a subpar offer.
By contrast, an independent life insurance broker has access to multiple carriers and can:
- Shop the market for the best underwriting class
- Strategically position the case to carriers who are most favorable to your risk profile
- Leverage relationships with underwriters to negotiate better outcomes
- Pivot to other products or structures if something unexpected surfaces
Think of it like having a knowledgeable advocate in a competitive bidding process. Your broker knows how to present your case in the best possible light and isn’t afraid to push back or ask for reconsideration if an initial offer isn’t up to par.
The Broker as Your Underwriting Advocate
In the same way a good attorney crafts the right narrative for a case, a strong life insurance broker builds the right story for underwriting.
That means:
- Pre-screening medical information confidentially before a formal application is submitted
- Coordinating with your CPA, estate attorney, or CFO to ensure financial documentation is clear and well-justified
- Presenting the case to multiple carriers, often with a cover letter that frames your planning objectives and rationale
- Fighting for table shaving programs, preferred classifications, or flat extras to be removed when appropriate
Underwriting is part science, part art, and part negotiation. Having someone who speaks the language and knows how to navigate the back-and-forth matters—especially when the stakes are high.
Final Thoughts: Underwriting Isn’t a Hurdle. It’s a Gateway.
While the underwriting process can feel tedious, it’s there for a reason. Carriers are making long-term commitments, often for tens of millions of dollars, and they need to price that risk accurately.
But that doesn’t mean clients should accept the first offer or feel boxed in. With the right guidance, underwriting becomes an opportunity to secure the most favorable terms possible and ensure that the policy is built on a foundation of clarity and confidence.
For high-net-worth individuals, business owners, and the advisors who serve them, working with an experienced, independent broker isn’t just a preference. It’s a planning essential.
Because in life insurance, as in life, how you tell the story makes all the difference.
Let’s Talk
At Summit Legacy, we specialize in helping individuals and families prepare for the future with life insurance solutions that include long-term care riders. If you’re ready to explore how these policies can fit into your financial plan, we’re here to help.
Contact us today for a personalized consultation. Together, we can create a strategy that supports your goals and provides the security you deserve.
