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Originally Posted by onetwo_threefour
^ I've heard that before Slava, that the insurance is underwritten at the time of the claim. I've not been clear on what is meant by that though. Surely, if you've been paying premiums the insurer is obligated to insure you at the time of a claim since they approved you for insurance and set premiums based on risk at the time of application. Is this a way of saying that they can deny coverage based on an intervening event such as what I sad above, like being diagnosed with cancer or diabetes? That would make such insurance potentially useless for anything other than an accidental death it would seem. It would seem borderline unethical to me to sell something like that and be able to call it insurance.
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Well the way it works is that you sign and say "no" to a list of conditions (which is literally a full paragraph for example of conditions, risk factors and the like). At the time of claim they go back and take a look and see if they would've insured you based on that information (which is a really basic way of describing what happens). So, its not the intervening event here, but the original event.
What does happen though, is that people buy the insurance and pay premiums for years and find out in the event of a claim whether they're entitled to coverage. At that point, its much more tenuous than your own stand-alone policy though, where the outcome is much more known.