What is a common outcome if a policyholder fails to disclose relevant medical information?

When a policyholder fails to disclose relevant medical information at the time of application, it can lead to serious consequences for their insurance coverage. The most common outcome in such a scenario is that the insurer may cancel the policy and deny future claims. This is due to the principle of utmost good faith, or "uberrima fides," which requires both parties in an insurance contract to act honestly and disclose all material facts related to the risk being insured. Failure to provide complete and truthful medical information can be viewed as misrepresentation or non-disclosure, which may give the insurer grounds to void the contract or refuse to cover claims related to undisclosed conditions.

Understanding this principle emphasizes the importance of transparency between policyholders and insurers and reinforces the need for insurers to assess risk accurately based on complete information. This also helps in maintaining the integrity of the insurance pool, ensuring that premiums are fair and claims are managed within the context of the insurable risk presented at the policy's inception.