The Importance of Full Disclosure for Assurance Underwriting

by | Dec 1, 2018

With Momentum Life making headlines regarding the repudiation of Mr. Ganas widow’s life assurance claim due to him having a high blood sugar level which was not disclosed at the underwriting stage, this after her husband was killed from a gunshot wound as a result of a violent crime, it has highlighted the importance of ensuring that all life assurance applicants make full disclosure when applying for long-term assurance with any assurer.

Although Momentum have since agreed to pay the claim due to increasing pressure from the media and public in general, and them creating new policy surrounding death caused by a violent crime, Momentum were well within their rights to repudiate the claim due to Mr. Ganas having not provided full disclosure at the underwriting stage, and therefore being in breach of contract, despite the cause of his death not being as a result of the medical condition what so ever.

If an applicant tries to hide pertinent medical information at the time of underwriting, this can lead to claims being repudiated at the discretion of the insurer, and can result in you or your beneficiaries, who may be dependent on the funds, being left in a terrible financial position, and all of the premiums which were paid, having been in vain. It simply nullifies any good intentions the insured person may have had to protect themselves and their dependents when initially taking out the long-term assurance policy.

It is however important to note that should your health deteriorate after the underwriting has been completed, such as elevated blood pressure, increase in cholesterol, increase in body mass index, etc., whether it be immediately, or after a number of years, it is not necessary to disclose this to your insurer, and any claims which you may have in the future cannot be negatively affected by this deterioration in health, even if it is the cause of a claim event.

If you do find yourself in a position where you are charged a higher insurance premium at underwriting stage due to health concerns, and you recover fully from the afore mentioned health concerns, it is important to notify your insurer of this, and after a medical examination to prove there is no further concern, the insurer may reduce your monthly premium accordingly.

If you feel there may be discrepancies with the disclosures you made to your insurer at the underwriting stage, or you would like us to requote on your insurance in order to be certain your underwriting status is not compromised and you are paying the best premium for the most suitable cover, please contact us and we will gladly assist you in this regard.