If a customer deliberately withheld details of family history on a critical illness policy, what is the insurer likely to do?

When a customer deliberately withholds information about family history on a critical illness policy, the insurer is likely to decline the claim, cancel the policy, and retain the premiums. This is because insurance contracts are based on the principle of utmost good faith, requiring both parties to disclose all relevant information. If the insurer discovers that the customer intentionally concealed crucial details that could have influenced their decision to issue the policy, they have the right to void the contract.

In such cases, the insurer can assert that the policy is no longer valid due to misrepresentation, meaning that the terms agreed upon were based on incomplete or misleading information. Retaining the premiums is standard practice since the insurer provided coverage based on the risk assessment that was compromised by the omission. This serves to illustrate the importance of transparency during the underwriting process, as it protects both the insurer's risk assessments and the insured's interests in securing valid coverage.