Underwriting Factors of Health Insurance

Published: | Updated: December 21, 2017

Definition - What does Underwriting Factors of Health Insurance mean?

The underwriting factors of health insurance are the factors that a health insurance company uses to make decisions about issuing health insurance policies. Some of these factors are age, weight, and existing health conditions. However, the Affordable Care Act makes it illegal for health insurance companies to deny coverage to people with preexisting conditions.

Insuranceopedia explains Underwriting Factors of Health Insurance

Health insurance companies need to use underwriting factors to help them come up with pricing structures that allow them to make a profit. If they assume too much risk without getting paid enough in premiums, they will actually lose money. So, it is important for health insurance companies to make sure that they analyze the underwriting factors correctly and make good decisions based on them. Otherwise, they can run into financial trouble very quickly.

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