Life assurance and non disclosure material facts

D

Danmo

Registered User
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We sold our house last year and took out a new mortgage and a new life assurance on the new property. When we filled in the life assurance forms and submitted them all was ok for us both healthwise. Between the application and the issuing of the policy my husband had a heart attack. I am worried that our policy is now null and void because of non disclosure of this fact – (please don’t criticise - the whole thing was a mess and we just wanted to get into the new house – long story). My solicitor says that what matters is the application and if we told the truth (which we did) the policy should stand. . My broker says the policy is probably void. The wording of the policy itself is very vague. We are paying a substantial loading on the life assurance anyhow because of my husband’s age. It is costing €160 a month. We are thinking of remortgaging in my name only, extending the term and taking out a new policy for just me which would cost €30 a month. This would leave us an extra €500 a month disposable income. We are struggling at the moment to pay our mortgage after the interest hikes and can’t manage to save at all. It would of course mean I would have no cover if my husband passed away but the way things stand we are probably not covered anyhow if anything happened and paying out money on a useless policy. There would be a death benefit due from his job which would go some way to helping me should the worst happen. Sorry for the long post. Any views?
 
You are obliged to inform your insurance company of any material fact or change in material facts that come to light between the date of signing the proposal and issue of the policy. You should contact your insurance company and advise them of what has happened. They may cancel the policy form inception but at least you will know where you stand. Insurance companies will aoid paying out claims where at all possible so if anything did happen and the insurance company was to dicover the non-disclosure of a material fact (which i have no doubt they would), you would be left with nothing.
 
Something similar happened to me and my husband, sent of life assurance application form, husband had serious accident, forgot (stress of hospitilisation etc ) about life policy which arrived soon after accident and then a couple of months later wrote to the life insurance company explaining the accident, they looked into it - medical reports etc - and decided nothing needed to be done. For sure you should tell the insurance company what has happened. Then at least you know where you will stand before taking any decisions. Hope everything goes ok for you both healthwise in the future.
 
It actually never occured to me to just take the direct approach.....

Thanks for the responses
 
Hi Danmo,

Depending on month end time delay factors come into play. Of course the company can dispute that if your policy has not been administrated then there is actually no policy in place so they are not liable but the timeframe must be taken into account and if a reasonable timeframe has occurred since you signed the paperwork then the policy should be valid ie with or without receipt of policy documents.

Before you amend your life cover check the t&cs of your policy and if necessary make a call to the underwriting dept of the assurance co. I'd recommend telling exactly what happened and check if you are eligible to claim your husbands life assurance (should the need arise). Weigh up the short term benefits of paying less into your life assurance now v your future requirements. From your post this possibly might come down to the affordability of the current life cover including the loading. If you're finding payments a struggle at the moment perhaps check into the possibility of taking more basic mortgage protection in your own name only as you pointed out. Of course this depends on personal and financial circumstances and if in any doubt please seek one to one professional advice based on your own circumstances. Also your current mortgage lender will have to agree to life cover being in one name only.
 
My mortgage provider has since contacted the life assurance company who said that they won't pay out on the policy. They will be writing to us with a view to reviewing the policy. Fingers crossed that we can afford the new premiums....thanks all for input
 
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