When you apply for personal risk insurance the insurer will ask a lot of questions about your health. This is so that the insurer can assess the likelihood of you making a claim and for setting the premium. You must answer these questions completely and honestly. If you don’t, the insurer is entitled to refuse a claim on the grounds of ‘non-disclosure’, with or without a return of your premiums.

When you apply for insurance, the insurance company will rely on the information it receives to decide on the terms and conditions for your insurance. It will ask for certain particulars and you must provide complete, up to date and relevant information in response to any questions asked.

You must also tell the insurer of any information that you may have that will be “material” to the risk you wish to insure. This includes any information that would influence the decision of a prudent insurer to decide whether to accept the insurance and if so, the terms that will apply including the level of premium, limitations on cover, an exclusion, or any other special conditions.

If in doubt, you should give information to the insurer for consideration. The disclosure duty exists not only when the insurance is taken out but also while your application is being underwritten. 

The most common thing people fail to disclose is with their pre-existing medical conditions. In many cases, people accidentally leave out information because they have forgotten, or do not realise it is important.

For example, a health insurance claim for surgery was declined because when the consumer applied for insurance and she had not disclosed she had depression years before. Although it didn’t relate to her claim, the insurer was still entitled to avoid the entire policy, because the information about depression would have changed the terms on which the policy was issued.

The current law requires a consumer to disclose to an insurer all information a “prudent underwriter” would consider important. This is extremely difficult for consumers to understand but for the time being this is the legal requirement. Insurers do tell their customers they need certain information, but frequently consumers don’t understand the consequences of not providing the information meaning claims are denied and policies are cancelled.