Insurance applications - disclosure requirements

Lanky_Ad_4935

Hi all,

Hoping someone who knows more about insurance can provide some guidance.

Last year I had made an application for critical illness cover when securing FTB mortgage. This was done through my mortgage broker. L&G offered standard terms about a month ahead of qualified acceptance (Scottish sale). Once I had received QA (day before entry) I moved to finalise the CI cover, part of which included undertaking final questionaire regarding health / lifestyle.

However once this was undertaken the CI terms were revoked due to disclosure of drug use 4 years earlier. (As I expected to be on my medical record I didn't feel I had much choice). 

Would I need to disclose that this insurance was revoked when applying for any future insurance products (e.g. car insurance etc.)? Some insurers only seem interested if there if previous insurance was cancelled due to fraud / misrepresentation. Therefore to my layman's interpretation means I would be OK? (As I didn't misrepresent anything)

My original broker's response when I queried it this morning was below:

"As I am only the broker, it would need to be the insurer themselves who would advise you on whether this would need to be disclosed on any future applications for this or other types of insurance. 

My guess would be no as you did make a full disclosure and no claim was ever made on the cover, but only the insurer themselves could clarify one way or the other."

I was a little confused by this - why would I need to ask company A if I need to disclose the revoked terms to company B? Am I missing something here?

Anyway, if anyone's read this far then thanks. Any thoughts would be welcome.

Annemos

(Welcome to the Forum)

Other experts will be better placed to advise. But from what I have read before on this site  .......  this seems more of a "decline to cover", because of a profile they did not want to accept in their policy parameters. 

So I believe you may not have to declare this. 

You did not do any form of misrepresentation. And you were right to have declared it. 

But in the post below, DGG also wrote this: 

"However, be a little more careful, some ask a more in-depth question than simply "ever had insurance declined" and can add "ever not been offered renewal terms" (or words to that effect). With that question you would need to answer yes." 

https://forums.moneysavingexpert.com/discussion/comment/80274087#Comment_80274087?utm_source=community-search&utm_medium=organic-search&utm_term=decline+to+cover


Let's wait and see what others think about this. 

DullGreyGuy

Car/Home etc won't care... its a simple decline to quote which is common in general insurance.

For further applications for Protection/Long Term insurance you will be applying via a broker, hopefully a whole of market advisory broker, and it is worth advising them of the declinature as 1) it stops them applying to the same company again and 2) lets them know what the hot spot is for them to tackle. 

Whilst many of the insurers are independent many of them buy reinsurance from the same reinsurers which will mean they have common points of concerns if PLR or PRIAC aren't willing to take on risks with "recent" drug use or XYZ condition. 

Lanky_Ad_4935

I had some further dialogue with the insurer directly. Unfortunately they appear to have ruled that it is not a decline to quote.

Is it worth pushing back on this? As far as I'm concerned there was no non-disclosure, accidental or otherwise  I don't have anything in writing which confirms a non-disclosure, e.g. record of application questions.

"Can you please confirm whether L&G consider this as a 'Decline to Quote'? Or is it considered as a 'cancellation'/'refused'/'declined'?

• The policy is considered as declined and subsequently cancelled with any premiums paid refunded.

Specifically, would this insurance application require to be disclosed when responding to the following query for other unrelated insurance products:

"Have you ever had insurance declined, cancelled, voided, or had special terms imposed?"

• In relation to Life Insurance with Legal & General we consider the policy as declined."

Lanky_Ad_4935

Sorry, last post probably isn't clear. I'm not sure whether insurer considers that there has been 'non-disclosure' or 'misrepresentation', which is what other insurers are probably interested in. If yes, then I'd argue that is very unfair as I declared all information when asked. 

BarelySentientAI

Lanky_Ad_4935 said:

Sorry, last post probably isn't clear. I'm not sure whether insurer considers that there has been 'non-disclosure' or 'misrepresentation', which is what other insurers are probably interested in. If yes, then I'd argue that is very unfair as I declared all information when asked. 

Other insurer's don't normally ask why you had a policy declined, just whether you did or not.

Although I still think the circumstances seem much more like "decline to offer terms" than "cancelled policy", despite the bullish response you got from L&G.

dunstonh

It is not a decline to quote.  It is something you would need to declare on any future medically related insurances.   It is not something you need to declare on household or motor.

If the broker/adviser had enquired to the underwriter before submitting the application, then that is enquiry. i.e. to get an understanding of whether they would accept it or not.
If the application was submitted and then rejected, then would need to be declared.

DullGreyGuy

dunstonh said:

It is not a decline to quote.  It is something you would need to declare on any future medically related insurances.   It is not something you need to declare on household or motor.

If the broker/adviser had enquired to the underwriter before submitting the application, then that is enquiry. i.e. to get an understanding of whether they would accept it or not.
If the application was submitted and then rejected, then would need to be declared.

Fully agree though would add that a decline in long term insurance is not treated in the same way as it is in general insurance. Company A won't increase your premiums just because Company B declined it after the application was submitted. 

In my personal case I was declined when an IFA submitted our application for PHI and Relevant Life, when switching to a broker they felt the insurer that had declined was the best place for the PHI and ultimately got them to accept with a small loading unrelated to the condition that they'd declined on. The Life they did go for another insurer and they accepted, despite the prior decline too... it was supposed to be a loaded premium again due to lifestyle factors rather than medical but they forgot to and honoured the unloaded quote they gave.