What does the term 'underwriting' refer to in life insurance?

The term 'underwriting' in life insurance primarily refers to the process of evaluating risk and determining the premium for a policy. This crucial function involves assessing the applicant's health, lifestyle, medical history, and other relevant factors that could influence the likelihood of a claim being made. Underwriters analyze this information to decide whether to accept the application and, if so, at what cost—essentially, how much the policyholder should pay for their coverage.

By effectively assessing risk, underwriters ensure that the insurance company maintains financial stability while offering policies at fair rates. This process is vital as it helps protect both the insurer and the insured, ensuring that premiums accurately reflect the risk being undertaken by the insurance company.

The other choices do not accurately define underwriting: while marketing insurance products is essential, it does not relate to risk assessment. Filing a claim after a loss is a separate process that occurs after underwriting has already determined coverage. Managing the investment portfolio involves overseeing the financial assets of the insurance company, which is also different from the underwriting process focused on policy issuance and risk evaluation.