Final answer:
A Statement of Continued Good Health may be required when there is a delay in issuing a life insurance policy, as insurers need to reassess the policyholder's health to ensure the risk profile has not changed.
Step-by-step explanation:
When Is a Statement of Continued Good Health Required?
A Statement of Continued Good Health may be required for a life insurance policy when there has been a significant delay between the initial underwriting decision and the actual issuance of the policy. During this period, if the policyholder experiences a change in health, the insurer may request a new statement to assess whether the risk profile has changed. It's often needed when an individual has applied for a policy and has been approved but has not paid the premium within a certain amount of time. In such cases, insurers want to ensure that the policyholder's health status has not deteriorated, as that would affect the actuarially determined premium rates and the insurance risk pool. The statement can also be requested if the policyholder wants to reinstate a lapsed policy or increase the death benefit coverage.