What typically happens to applicants who do not meet underwriting criteria?

When applicants do not meet underwriting criteria, they are typically declined coverage or classified as higher risk. Underwriting is the process by which insurers evaluate the risk of insuring a person based on various factors like health history, lifestyle, and other relevant information. If an applicant presents significant risk factors or fails to meet the established criteria for coverage, the insurer may decide to decline the application entirely.

Alternatively, in some cases where specific risk factors are present but the applicant still qualifies for some form of coverage, they may be classified as higher risk, leading to increased premiums or limited benefits. This practice helps insurers manage their overall risk by ensuring they do not take on clients who may result in an excessive number of claims.

This approach is important for maintaining the financial health of the insurance company while also attempting to provide coverage options where possible.