The Importance Of Full Disclosure When Applying For Life Insurance

When applying for life insurance the importance of full disclosure cannot be stressed enough. We are all too familiar with the stories published in the media of life insurance claims being refused due to some seemingly minor or perhaps even irrelevant detail being omitted from the initial application.

So when you are applying for life insurance make sure you include every detail pertaining to your health and lifestyle regardless of how trivial it may seem.

Don’t be tempted to save money in the short term by withholding information or misleading insurance companies. For example some smokers may be tempted to claim that they don’t smoke as it may have a significant impact on the value of their monthly premiums. However when they come to make a claim, regardless of whether smoking was a contributing factor or not to them having to make a claim, their policy will more than likely be invalidated if it emerges that they were in actual fact a smoker.

Consumer Insurance Bill 2013

In April of 2013 a new bill came into effect which offers consumers protection against insurance companies rejecting life insurance claims on the basis of personal information that was omitted from the original application due to the insurance company failing to ask appropriate or pertinent questions.

This new law has helped to tackle the issue whereby many life insurance claims were rejected due to seemingly irrelevant information that was missing from the original application. Very often consumers failed to detail unrelated medical conditions and / or criminal convictions as they were not directly asked to do so, or they did not feel that they were relevant. However hidden in the small print of the contract was the need for applicants to detail all criminal convictions and / or medical issues – relevant or otherwise.

This new bill means that the onus is now on insurance companies to make sure that they directly and specifically ask all the questions they need answers to. The burden is no longer on the consumer to offer up information that he or she feels may or may not be relevant.

So unless you deliberately mislead insurance companies, or forget to include relevant information, there is no reason why your claim for life insurance should be challenged on the grounds of failure to disclose relevant information.