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'Non-disclosure' in life insurance… PART II

In July we commented on a very public storyrelating to an insurer voiding a policy for non-disclosure. We commented on the story based on information that was available to the public - that’s all the information we had available to us at that time.

Our view then was that the insured person did not disclose certain facts and the insurer was within its rights to void the policy.

In case you missed it, read our previous story PART I here.

The story is especially tragic because the insured person, Wayne Croft, has contracted cancer, is now terminally ill and is in serious financial difficulty. We suggested then that Wayne had only himself to blame for the predicament he is in.

Well now we’re thinking… not so!

In the past few days we’ve been sent some unsolicited details about this case suggesting we may owe Wayne an apology for our earlier comments. And given the tragic circumstances, we feel it's necessary to add balance to our previous comments. We now think Wayne’s the victim in this ugly mess.

You see, here’s the thing.

When an insurer offers you a policy, they do so with the information you provide them. If you hide details about your health when you apply, they have the right to void your policy if they catch you out later on. That’s how it works.


What if the health information you provide to the insurance company is so grossly inadequate they’re in no position based on this information to underwrite your application and make you an offer? What if you say on your application that you have a health problem but don’t give details? What if the insurance company simply ignores these red flags and the inadequate information and offers you a policy anyway?

Now the shoe is on the other foot… isn’t it?

The insurer has made you an offer based on information it knows to be grossly insufficient for the underwriter to do their job. You accept the offer in good faith. Has the insurer got the right to void the policy?

Not in our view.

We think this story is far from over. And we’d like to see a happier endingJ

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