Life insurance policies include a built-in protection window known as the contestability period, typically lasting two years from the date of issue. During this time, insurers have the right to review and verify the accuracy of the information submitted in the initial application. This process is known as post-underwriting risk assessment, and it ensures that the policy was issued at the correct risk class and premium level without any misrepresentation.
Why Insurers Conduct Post-Underwriting Assessments
Post-underwriting assessments (also referred to as post-issue underwriting or policy audits) are commonly used when coverage is approved through simplified or accelerated underwriting without a full medical exam. Insurers rely primarily on applicant disclosures, prescription history, and general records during simplified underwriting, so a later confirmation step protects the insurer from unintended risk exposure.
Assessments may be initiated for several reasons, including random audits of simplified-issue cases, inconsistencies in prescription records or medical coding, and cases involving higher coverage amounts or elevated risk indicators. When requested, insurers may ask for an Attending Physician Statement (APS) from the insured’s doctor to confirm ongoing stability, treatment history, and medical accuracy. The APS serves as a clinical verification tool during contestability.
Client Case Example: Simplified Underwriting with Positive Results
A client in his early 40s secured a $500,000 term life policy through simplified underwriting. He required fast approval to ensure family protection without undergoing a full insurance medical exam. His application was transparent: he disclosed long-term, controlled hypertension, consistently monitored through regular checkups, with no recent hospitalizations and stable results in annual blood work.
The insurer approved the policy at standard rates within days based on a brief health questionnaire and prescription review.
Approximately 16 months after issuance, still within the contestability window, the insurer requested an APS as part of its ongoing review protocols for simplified applications. The client’s physician confirmed that his hypertension remained stable, medication usage was unchanged, and there were no new diagnoses or complications.
Outcome: The original underwriting decision was validated and the policy remained in force at standard premiums. Once the policy surpasses the two-year mark, it will become incontestable (except in cases of proven fraud), providing uninterrupted and secure long-term coverage for his family.
How Post-Underwriting Can Affect a Policy
If the review confirms that the medical disclosures and risk information match the original application, then no changes occur and the policy continues in force exactly as issued. However, if differences are discovered, several results are possible. In some cases, the insurer may adjust the premium rating to reflect a higher risk level than initially disclosed. In more serious circumstances involving material non-disclosure—such as failure to report a significant condition—the insurer could rescind the policy entirely and refund premiums paid. These outcomes are strictly dependent on the accuracy of disclosures and the findings during the contestability window.
Importantly, after the two-year contestability period has passed, the policy becomes incontestable. This means that, provided fraud is not involved, a claim cannot be denied based on medical history disclosed at application, and coverage proceeds without reevaluating original health details. This provides the insured and their beneficiaries with long-term certainty and confidence in the policy’s reliability.
The Advisor’s Role in a Smooth Review Process
A knowledgeable advisor plays an essential role in ensuring that the application process is accurate and remains complication-free. This includes confirming full and transparent disclosure of medical conditions, medications, and history at the time of application, coordinating promptly with physicians if an APS is requested, and guiding the client through the expectations of simplified versus fully underwritten coverage options. Proper education about the contestability period helps clients understand why accuracy and openness at application time are crucial to long-term policy validity.
Important Disclaimer
This article is provided for informational and educational purposes only and does not constitute financial, legal, tax, or professional advice. Policy features, timelines, and underwriting procedures may differ by insurer, jurisdiction, and product type. Individuals should consult a licensed insurance advisor for guidance specific to their circumstances.