What is a Proposed Insured?
The Proposed Insured refers to the person whose life or health is being assessed for an insurance policy during the application process. This individual is the subject of the insurer’s underwriting review, which involves evaluating factors such as medical history, lifestyle, occupation, and other relevant criteria to determine the risk associated with issuing a policy. The insurer uses this information to decide eligibility for coverage and to set the premium rates.
For example, in a life insurance application, the Proposed Insured might be the person whose life is being insured, while the policyholder—the person applying for the insurance—may be different, such as a spouse or a business partner. In cases where the Proposed Insured is approved, they become the insured person under the policy.
The concept of the Proposed Insured is crucial in the insurance process, as their personal health and risk factors directly influence the coverage terms, policy costs, and the overall underwriting outcome.
