Life Insurance and Life Settlement Glossary - U

Life Insurance and Life Settlement Terms - U


(1) The person who assesses and categorizes the degree of jeopardy that a proposed insured represents. (2) The person or organization that guarantees that money will be available to disburse for losses that are insured against. In this sense, the insurance concern is the underwriter.


(1) The progression of assessing and classifying the degree of risk that a proposed insured represents. This is also known as selection of risks. (2) Providing guarantees that money will be available to disburse for losses that are insured against.

Underwriting Department

The department in a life and health insurance concern that chooses the risks that the firm will insure. The underwriting department endeavors to make certain that the actual mortality or morbidity rates of the company’s insured do not go beyond the rates assumed when premium rates were calculated.

Underwriting Impairments

Factors that tend to augment an individual’s risk above that which is normal for his or her age.

Underwriting Requirements

Printed instructions that indicate what evidence of insurability is essential for a given situation and which of more than a few optional information sources will be needed to give underwriters with necessary information. Sources of information may comprise medical records and the results of physical examinations.

Uninsurable Risk Class

The group of people with a risk of loss so great that a life insurance firm will not proffer them term life insurance.

Universal Life Insurance

A type of permanent life insurance that is characterized by its flexible premiums, flexible face amounts, and unbundled pricing factors.

Umbrella Policy

Coverage for losses above the limit of an underlying policy or policies like homeowners and auto insurance. While it applies to losses over the dollar amount in the underlying policies, terms of coverage are sometimes wider than those of underlying policies.

Unbundled Contracts

A type of annuity contract that gives purchasers the freedom to opt among certain optional features in their contract.


The result of the policyholder’s failure to purchase sufficient insurance. An underinsured policyholder can only get part of the cost of replacing or repairing damaged items covered in the policy.


Examining, accepting, or rejecting insurance risks and classifying the ones that are accepted, in turn to charge appropriate premiums for them.

Underwritng Income

The insurer’s benefit on the insurance sale after all expenses and losses have been paid. When premiums aren’t enough to cover claims and expenses, the result is an underwriting loss. Underwriting losses are typically offset by investment income.

Unearned Premium

The portion of a premium already got by the insurer under which protection has not yet been provided. The complete premium is not earned until the policy period expires, even though premiums are naturally paid in advance.

Uninsurable Risk

Risks for which it is difficult for someone to obtain insurance.

Uninsured Motorists Coverage

Part of an auto insurance policy that guards a policyholder from uninsured and hit-and-run drivers.

Universal Life Insurance

A flexible premium policy that combines protection against premature death with a kind of savings vehicle, called cash value account that naturally earns a money market rate of interest. Death benefits may be changed during the life of the policy within limits, normally subject to a medical examination.

Utilization Review

The practice used by insurance firms to review claims for medical treatment.