What is the primary purpose of medical examinations in insurance?

The primary purpose of medical examinations in insurance is to help assess the risk associated with insuring an individual. When an applicant seeks life or health insurance, the insurer needs to determine the likelihood that the individual may require significant medical coverage, which is often indicated by their current health status. Through a medical examination, insurers gather vital information regarding the applicant's medical history, current health condition, and possible future health risks. This data directly informs the underwriting process and helps the insurer establish a fair and accurate premium amount that reflects the level of risk presented by the applicant's health.

Assessing the health risk through medical examinations ensures that individuals who may pose a higher risk of claims, due to preexisting conditions or other health factors, are appropriately evaluated, resulting in a premium that corresponds to the risk of insuring them. By using this information effectively, the insurance company can maintain financial stability while providing coverage that is fair to all parties involved.