Anyone who has applied for insurance knows that the application process can be tedious. The insurance carriers ask about your travel history and future plans; smoking, alcohol and drug usage; driving, criminal and family health history; and participation in hazardous sports. To top it off, they ask you about 135-140 different medical conditions that you may have now or may have been investigated or treated for in the past. Needless to say, it is very comprehensive.
Although it may feel like an invasion of privacy, the best way to ensure a future claim will be paid is to provide full and absolute disclosure on the application. Once the insurance is in force, the application forms part of the contract. Those who have heard me speak about insurance know that the contract is king and dictates how and when you will qualify for a claim.
Every contract includes a contestability clause for the first two years the policy exists. This feature allows the insurance carrier to further investigate the answers on your application at the time of claim to ensure there were no material misrepresentations made. A misrepresentation is considered material if it would have changed the way the policy was issued had the carrier known about it. If a material misrepresentation is found, the claim can be denied or, worse, the policy can be rescinded and considered null and void. After two years, the insurance carrier has to prove that the misrepresentation was made fraudulently. This can be more difficult to prove, which gives you more security, but can be the source of some major legal bills.
The moral of the story is: include every detail on your application. The questions asked may have time frames on them (e.g. “In the last 10 years have you been charged with or convicted of any criminal offences”). If there is no time frame specified, you must include details for your entire life. A “yes” answer on an application does not necessarily mean the policy will be declined or modified. The broker should ask you for more details so that she/he can paint the appropriate picture for the carrier. Injuries, illnesses, testing, and so on should all be included even if the injuries or illnesses have resolved themselves and/or if the testing came back clear.
It is in your best interest for the application to be as complete as possible. In the event of a claim, you want to be sure that the insurance company will pay, which you can only do by being completely honest with them.