When you make a claim on an insurance policy, the company can either pay the claim, deny the claim or rescind the policy. Policy rescission occurs when the company rejects the policyholder once they make a claim, instead of at the time of application. Once you make a claim for benefits, the company will review your application, looking for any misrepresentation that would allow them to rescind the policy. For instance, they may examine your medical files, searching for a procedure not included in your application and try to use it as a means to cancel your policy. Insurance rescission allows insurance companies to increase their profits.