Post-Claim Underwriting
Post-claim underwriting occurs when an insurance company reevaluates a policy after a claim. They may raise the premium, change benefits, or cancel the policy altogether. Post-claim underwriting is illegal for federally qualified Long-Term Care Insurance policies.
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Post-claims underwriting occurs when an insurance company changes your policy after you file a claim. This happens when a company does not complete the underwriting they need to when you initially apply for coverage. Instead, they complete it at the time of claim.
Unfortunately, many people don’t meet their insurer’s underwriting requirements at the time of claim. Because of this, insurance companies may cancel your policy. In other cases, they may raise your premium or limit your benefits.
A good example of post-claim underwriting is in auto insurance. An auto insurance company may raise your premium when you get into an accident and file a claim.
However, post-claim underwriting is illegal in Long-Term Care Insurance. It's illegal for any policy that meets federal guidelines under Section 7702(b). To learn more about federal guidelines, review our FAQ article on regulations.
Long-Term Care Insurance companies can’t cancel your policy or change your premiums or benefits based on claims or changes to your age or health.
Instead, the proper underwriting happens at the time of application. Long-Term Care Insurance companies can only consider your health at the time of application. Changes to your health or age can’t affect your policy after you've qualified for coverage.