How is "underwriting" defined in the context of life insurance?

Underwriting in the context of life insurance refers to the evaluation of risk and determination of premium rates. This process is crucial for insurance companies as it helps assess the likelihood of a policyholder filing a claim based on various factors, including age, health status, lifestyle choices, and family medical history.

By performing this thorough evaluation, underwriters can determine the appropriate premium rates to charge, ensuring that they remain financially viable while also providing coverage to policyholders. This careful balancing act allows insurance companies to manage their risk and provide fair pricing based on the individual risk profile of applicants.

The other options do not accurately describe underwriting in life insurance. Selling insurance policies relates to the distribution aspect, handling claims focuses on the post-issue process, and underwriting securities pertains to a different financial context, related to investments rather than risk assessment in insurance.