underwriting
Underwriting is how an insurer decides whether to cover you and at what price, based on how likely you are to claim.
In plain English
When you apply for insurance, somebody assesses you. That assessment is underwriting, and understanding it changes how you should behave.
The underwriter's job is to estimate the risk. How likely are you to claim, and how much would that claim cost? A young non smoker pays less for life cover. A vehicle in a high theft area costs more to insure. A business with a poor safety record pays more, or is declined.
This is why every question on the application matters enormously, including the inconvenient ones.
The temptation is to shade the truth. To not mention the condition. To describe the vehicle's use a little generously. It feels harmless, and it lowers the premium, and it destroys the policy.
Because an insurer that finds an inaccuracy at the point of claim can refuse to pay, and they look hardest precisely when the claim is large. You will have paid premiums for years and bought nothing at all.
So answer every question fully and truthfully, even where it raises the price. A higher premium that pays is infinitely cheaper than a low one that does not.
You are not buying a premium. You are buying a claim.
You omit a health condition to reduce your premium. Years later a serious claim is made and the insurer reviews the application, finds the omission, and refuses. Every naira of premium you paid bought you nothing whatsoever.
Questions people ask
Why does the insurer ask so many questions?
Because the price depends on the risk, and the risk depends on you. Every question is there to price you accurately.
What happens if I get something wrong innocently?
It can still jeopardise a claim, which is why accuracy matters more than intention. If you realise afterwards, tell the insurer promptly and in writing.
Can I be refused cover?
Yes, if the risk is too high or outside their appetite. That is not personal, and other insurers may see the same risk differently.
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