What Must You Disclose When You Buy Life Insurance?

This concern an applicant's duty of disclosure.

It is the duty of the applicant [the proposer] to disclose - important i.e. clearly and accurately, all material facts relating to the proposed insurance. Indeed, it is a positive not a negative duty.

It is confined to matters of fact not a matter of opinion. A FACT which would affect the judgement of a prudent underwriter in considering whether he would enter into a contract at all or enter into it at one rate of premium or another.

A material fact would include any communication made to, or any information received by, the proposer.

The proposer must disclose before the contract is concluded all material facts which he knows, or ought to know. Failure to make such disclosure renders the contract voidable, at the insurer's option. This is so even if the failure to disclose is inadvertent, or where the proposer honestly regarded the fact as immaterial.

Whether or not a fact is material cannot rest upon the opinion of the proposer.

What is material is a matter of fact, and the final judgement can be given only by a court of law. Expert evidence may be called to prove or disprove the materiality of a fact which has not be disclosed.

So when you buy a life insurance policy, remember, as a proposer the onus is on you "to disclose in the proposal form, fully and faithfully all the facts which you know in respect of the risk that is being proposed, otherwise the policy issued may be void. This is clearly stated on the Proposal Form pursuant to Section 25[5] Insurace Act, Cap 142 [or any subsequent amendments thereof] [for Singapore].

I will continue to share with folks what I know and hope this bit of knowledge that I acquired is useful.