What is the difference between "underwriting" and "pricing" in Aflac policies?

• A. Underwriting determines eligibility and final terms; pricing sets the premium based on risk and policy features.
• B. Underwriting sets the premium; pricing determines eligibility.
• C. Underwriting handles marketing; pricing handles claims.
• D. Underwriting and pricing are the same.

Answer: (A)

Underwriting is the risk assessment that determines whether you qualify for a policy and what the final terms will be (things like coverage amount, eligibility, and any exclusions). Pricing is the calculation of the premium that you pay, based on the risk and the specific features of the policy (coverage amount, riders, and other plan details).

In Aflac products, the underwriter reviews factors such as age, health history, tobacco use, and requested coverage to decide if you can be insured and what exact terms apply. Once those terms are set, the pricing team uses them—along with your risk factors and plan features—to compute the premium. So underwriting decides eligibility and final terms, while pricing determines the cost of those terms.