Customer failed to disclose all relevant details in policy application

Categories:
Health insurance,
Summary:
In 2016 and 2018, Zhen took out insurance policies, including private health insurance, through the bank. In 2020, he made a claim on his private health insurance policy to pay for a colonoscopy. However, on receipt of supporting medical information for the procedure, the underwriter discovered Zhen had not disclosed relevant details about his medical history when he applied for the insurance. The underwriter declined the claim and applied exclusions to his policies and reduced the sum insured amounts.
Published:
July 2022

 

Zhen appealed unsuccessfully against this decision. He complained that the bank was responsible for the non-disclosure because it completed the applications verbally and had not gone through all the questions on the forms. He said it had also told him he just needed to tell it about diseases, which he understood to mean diseases for which he had a confirmed diagnosis. He also complained that the bank had pressured him into taking out the policies and cancelling his existing insurance policy, which would have provided the cover he needed.

Our investigation

We interviewed both Zhen and the bank officer who sold Zhen the policies. The officer spoke Zhen’s native language, Mandarin, and completed the verbal sales process in that language. She also had six years’ experience in selling insurance policies. We reviewed all available information, including diary notes, the application forms and the documentation sent to Zhen about the policies. We could find no evidence to suggest the bank was responsible for the non-disclosure. The application forms included various health questions, not limited to diseases, and some answers had been provided to these questions, although the answers were not accurate. Zhen signed the forms and in doing so acknowledged he had a duty to disclose all information he knew, or reasonably could have known, that would influence the decision to insure him. The documentation sent to him included copies of the application forms and the answers to the questions he had given. The officer had called him after sending this information and spoke to him in Mandarin, explaining to him that it was important he review the information. Also, the bank’s diary notes did not support Zhen's claim that the bank had pressured him into taking out the policies or cancelling his existing policy. Rather, the notes showed he was willing and comfortable declining offers to discuss insurance offers and actively sought the second policy because his existing policy did not provide the cover he wanted.

Outcome

We could not uphold Zhen’s complaint.

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