What is meant by 'underwriting' in health insurance?

Underwriting in health insurance refers to the process of assessing the risk associated with insuring an individual or group and determining the appropriate premiums based on that risk assessment. During underwriting, insurance companies evaluate various factors such as age, medical history, lifestyle choices, and other relevant information to estimate the likelihood of future claims. This analysis helps insurers to set premiums that align with the risk profile of the applicant, ensuring that the premiums collected adequately cover potential claims while also allowing the insurer to remain financially viable.

The other options do not accurately capture the essence of underwriting. Evaluating customer service ratings does not pertain to the risk assessment process, while collecting policyholder payments is an operational task unrelated to the underwriting process. Lastly, advertising insurance products is a marketing function, focused on promoting the insurance rather than assessing risks or determining premiums.