CR154

Non-disclosure of material information. Proposer’s mental status at the time non-disclosure featured is questioned.

Background

The policy, which provided life cover together with dread disease benefits and occupational disability cover, commenced in January 2002. As a result of the non payment of premiums the contract lapsed in January 2003 but was subsequently reinstated later that year following submission of medical evidence. Further medical evidence was presented in May 2005 in support of a disability claim. This revealed non-disclosure of material information at the time of revival in 2003 and as a consequence the contract was voided from the date of revival.

Assessment

The complaint was submitted by the life assured’s wife and stated that her husband suffered from dementia, either due to Alzheimer’s or Pick’s disease. The complainant’s case was that her husband’s mental faculties were already affected in 2003 and both non-payment of premium and non-disclosure were related to memory loss. This is possible but only conjecture. The clinical neurophysiologist’s report stated that when examined in August 2004, the life assured’s condition was relatively far advanced which could mean that an impaired mental state could have contributed to his memory lapse when completing the revival questionnaire in 2003. Whilst it was accepted that symptoms relating to dementia may have existed prior to the lapsing on the policy there is no hard evidence of actual symptoms prior to the date of revival. Had the insurer been aware of the of the medical history suggesting dementia prior to the revival date the contract would not in fact had been reinstated.

Result

We supported the insurer’s view that it was not liable and all premiums paid subsequent to the revival date were refunded.

DM
April 2006