What is one of the primary purposes of health insurance underwriting?

The primary purpose of health insurance underwriting is to assess risk and determine eligibility. Underwriting involves evaluating an individual's health status, medical history, and other factors to determine the likelihood of future claims. This process is crucial for insurers to establish whether they will provide coverage and at what cost. The assessment helps to ensure that premiums are commensurate with the risk posed by the insured individuals, enabling insurance companies to maintain financial stability while offering coverage.

Immediate coverage is not an objective of underwriting, as evaluations must be completed before a policy can be issued. Similarly, underwriting does not focus on reducing benefits; rather, it aims to balance risks while providing appropriate coverage. Increasing premiums for all insureds is not a goal of underwriting; instead, the practice is intended to tailor premiums based on the risk profile of individual applicants. Thus, the focus on risk assessment and eligibility determination is central to the underwriting process in health insurance.