For an insurance company to have a stable and profitable portfolio, it is essential to keep the lapse rate low and prevent early claims or fraud.

Financial underwriting is a plausibility check to ensure that the requested cover makes sense. This helps reducing anti-selection and moral hazards.

The following points should be checked:

• Match the reason for the cover, insurable interest, policy type, and affordability to the potential loss
• Check the levels of existing cover to prevent over-insurance
• Review the supporting financial evidence (depending on the requested amount)
• Request further information to ensure the risk is fully understood and where the picture is less clear

However, each case has unique circumstances which might require individual consideration.