A free nz community service
Non-Disclosure
When in doubt - mention it
But it's Private! It happened years ago!
The Underwriter is the person who determines what is relevant or significant when you apply for insurance. If the applicant starts to decide what is relevent or significant, that's when things can go badly wrong. The Insurance Policy is a legal document and is based on the applicant being honest and providing full information as requested in the application form.
The Underwriter can only make decisions based on the information provided to them. If that information is later found to be false or incomplete the contract can be cancelled or made Null and Void, with usually no refund of premiums paid.
Often an Underwriter will request a GP Report. Within the GP report there are often historical notes that refer to conditions or appointments regarding health issues or concerns. When comparing GP notes to answers provided by the applicant, there are sometimes significant and serious factors that have not been mentioned by the applicant.
The Worst Case Scenario is for a policy to be in place for years, then a claim is made, the Claim Assessor requests medical information and a GP report, and THEN finds that important information was not provided before the policy was put in place. Then "after paying expensive premiums for years" the claim is turned down, due to Non-Disclosure, and the policy is cancelled. Had the person initially provided full information, the policy may still have been put in place, and a claim paid at claim time.
The Underwriter Protects the applicant from this worst case senario, before years of premiums are paid, as long as full information is provided.
Underwriters and Claim Assessors fully understand that we are only human, and may not remember that we had a particular condition 30 years ago as a child. But if it is a serious condition or event that any reasonable person would be expected to know or remember, like falling off a horse and breaking their back in two places when they were aged 8. It might be reasonable for a person to say they did not remember having measles when they were aged 4, or their parents never told them they were diagnosed with a heart murmur when they were aged 9. Those decisions are left to the Underwriter and the Claims Assessor.
I have been in Client meetings with couples where one person becomes very quiet, knowing that the other Partner does not know something about them. It could be bankruptcy, a sexual disease, a criminal past, a hidden medical issue. In the moment sometimes they do not fully disclose - but then contact the Adviser or the Insurance company privately to discuss before the policy is put in place. That certainly is one option. But not to disclose at all, is not good.
It is very hard to fool insurance companies - they generally always find out. So better to be honest and up front, and don't pay a policy premium for years, only to be turned down at claim time.