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Insure your dream holiday?? ...hmm, you'd better read the fine print.

Here’s an interesting case study for life insurers… as reported in the NZ Herald on Saturday.

And to be honest, it isn't a story about 'holiday insurance', we're talking 'travel insurance'!

The reported facts are along these lines;

In August last year Helen Henwood was supposed to travel overseas on a dream $18,000 holiday.

Earlier, in March of that year, Helen had abdominal pains checked out by ultrasound with nothing found. She then got a medical certificate from her doctor in May with clearance to travel. A specialist visit in June also turned up zip, however she was referred for an additional scan.

Somewhere in this period, Helen booked her trip and took out travel insurance. Then a few days before she was scheduled to leave she had the scan, cancer was diagnosed and she had to forgo the dream trip.

So she claimed on her travel insurance for the cost of her trip.

Is Helen covered?

The insurance company claims that the cancer was a pre-existing condition under investigation which she had failed to disclose… and Helen is therefore not covered.

Helen argues that at the time she signed the insurance application, whilst the cancer pre-existed, it was not diagnosed and therefore she should be covered.

Who’s right?

Well… it’s hard to say because we don’t have some of the critical facts of this case to make a judgement.

Here’s the deal…

If Helen knew she was going for a scan and did not disclose that fact on her application form, then that’s material non-disclosure and the Insurance Company are correct. You see, if the insurance company had known that a scan was indicated, they would have had the opportunity to ask further questions and maybe wait for the result.

On the other hand, Helen clearly didn’t know that she had cancer when she signed the application, so she couldn’t have declared cancer when she applied. But… she did know she had been sent for a scan. So, if the application form had asked Helen something like “do you currently have any symptoms for which you are likely to require medical tests?” she would need to have ticked ‘yes’.

Conclusion

So, without knowing exactly what was asked and how Helen answered, we’ll just have to sit on the fence on this one.

Of course, regular readers of this blog would know that’s not a comfortable place for us…!

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