Underwriting
DEFINITION
Underwriting is the process insurance companies use to judge the risk they would take on when offering a policy. Using details such as age, current and past health conditions, and related statistics, the insurer decides whether to accept the risk and what premium to charge.
ELI5
It is how an insurer studies your situation before selling you a policy. They decide if they want to cover you and how much to charge.
Other related terms
Bullion
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Price-to-Earnings Ratio (P/E Ratio)
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Bond Funds
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Insurance
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