Long Term Care Certification Practice Test

Which of the following is an example of post claims underwriting?

1. An insurer notifies the insured a claim is denied based on incomplete information on the application

2. An insurer reviews the application while a claim is still open

3. An insured fails to disclose prior medical conditions

4. An insurer cancels a policy after the first claim is made

The correct answer is: An insurer notifies the insured a claim is denied based on incomplete information on the application

The chosen answer illustrates a clear example of post-claims underwriting, which occurs when an insurer assesses the information provided on a policyholder's application after a claim has been submitted. In this case, the insurer's decision to deny the claim due to incomplete information on the application indicates that they are evaluating the risk involved only after the claim has been filed. This process is problematic because it raises questions about the policyholder's understanding of their obligations when filling out the application and the insurer's responsibilities concerning clear communication about coverage. In post-claims underwriting, the insurer often revisits the original application to determine whether the policy should have been issued or if the claim should be paid based on the information disclosed at the time of the application. This situation can lead to disputes over claims, as policyholders may not have been aware that specific information was necessary for coverage. The other options depict scenarios that fall outside the definition of post-claims underwriting. For instance, reviewing an application while a claim is still open indicates an ongoing assessment rather than a retrospective evaluation after a claim has been made. Failing to disclose prior medical conditions represents a potential issue of misrepresentation but does not specifically illustrate the process of post-claims underwriting. Additionally, canceling a policy after the