What does "underwriting" refer to in life insurance?

Underwriting in life insurance refers specifically to the process of assessing the risk associated with insuring an individual and determining the premium that needs to be charged for that policyholder. This process involves evaluating various factors such as the individual's health, age, lifestyle choices, and medical history. Underwriters use this information to gauge the likelihood of a policyholder filing a claim during the term of the policy. By accurately assessing these risks, an insurer can establish a premium that reflects the level of risk they are assuming.

This method ensures that the insurance company can maintain financial stability by charging appropriate premiums to cover potential claims, while also providing coverage to individuals based on their unique risk profiles.