Why is life insurance underwriting so rigorous?
Life insurance underwriting is one of the most thorough and comprehensive assessments you will go through in the financial marketplace. Think about all the factors that are covered: your current health. Medical history. Family medical history. Occupation. Hobbies. Lifestyle. Finances. Legal record. Financial record. Driving record.
Why is that?
There are several reasons for this. One is that many of them in some way impact your mortality; they can increase the possibility of you dying sooner than later.
Another reason is that some factors show how good a customer you would be. Carriers do need to make money to pay out money in benefits; so, they must issue policies to people who would be well-paying risks.
One last consideration would be moral hazard. People up to no good, or who hang out with people up to no good, engage in the type of activities with which life insurance companies do not want to be associated.