Insurance traps and non-disclosure

WHEN Robert was 35 years of age, he took out a life insurance policy.

He had been receiving treatment for high blood pressure for about two years and although it was possible Robert did mention it to the insurance agent, there was no record of this in the proposal application filled out by Robert.

Robert dies from a heart attack at 55 years of age and his wife, Sally, as executor of his estate, makes a claim on the insurance policy for the deceased estate.

Prior to the insurance company considering the claim further, they require authority to contact Robert's doctor. When they receive the information, the insurer ascertains that Robert was receiving treatment for high blood pressure prior to the policy being taken out.

The insurance company refuses to pay out the policy on the basis there was a material non-disclosure of Robert's high blood pressure treatment at the time he took out the policy.

Sally seeks legal advice and is advised there is a duty to disclose this type of information when taking out a life insurance policy and the insurance company can validly refuse to pay out the claim in circumstances where high blood pressure would probably have some relationship to the subsequent heart attack.

When taking out life insurance, including accident and income protection insurance, it is best if you disclose any past medical treatment and if you have any doubt get a copy of the clinical notes from your doctor and give it to the insurance company.

The duty to disclose this type of information to the insurance company even applies when there is no appropriate section in the insurance proposal form to include information about medical conditions and treatment.

If you would like Manny to address a particular legal issue, send your request to or phone him on 02 6648 7487.