Insurer Prevails in Dispute Over Misrepresentation of Mental Health
Insurer Prevails in Dispute Over Misrepresentation of Mental Health
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
An individual who failed to disclose her history of mental health and medication use in her life insurance application has lost her dispute with the insurer.
The dispute arose when the complainant made a claim on her total and permanent disability (TPD) policy for major depression. In response, MLC (the insurer) decided to amend the policy by adding an exclusion for mental illness, effectively denying the claim.
The insurer argued that it was within its right to add the exclusion because the complainant had misrepresented her mental health history when applying for the policy in March 2015.
Upon reviewing the application form, it was discovered that the complainant failed to disclose her use of anti-depressant medication and provided incorrect answers to questions regarding her mental health.
Misrepresentation of Mental Health
One of the questions on the application form asked whether the complainant had ever experienced or sought advice for anxiety, stress, or sleeplessness. The complainant answered "No," despite having a history of depression and taking medication for it.
The Australian Financial Complaints Authority (AFCA) determined that this answer was a misrepresentation.
The complainant also provided a false answer to another question regarding the use of medications in the last five years. Despite her two-year history of depression and recent medication use, she answered "No" to the question.
AFCA concluded that these misrepresentations were significant in the insurer's decision to add the exclusion for mental illness.
Ruling in Favor of the Insurer
The complainant argued that she was unaware of her depression diagnosis and believed her medication was intended to improve her mood, rather than treat depression.
However, AFCA rejected her explanation, noting that she had sought treatment for "anxiety-related condition" and had taken medication to improve her mood.
AFCA ruled in favor of MLC, stating that the insurer demonstrated the intent to add a mental illness exclusion even without the complainant's misrepresentations. The ombudsman also noted that other insurers would have made similar decisions.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
In recent years, Australian businesses have faced a significant increase in insurance premiums, with rates rising by 51% over the past five years. This trend has raised concerns among small to medium business owners about the affordability and accessibility of essential insurance coverage. - read more
Australian insurers are currently experiencing an unprecedented surge in consumer complaints, with the Australian Financial Complaints Authority (AFCA) reporting a record 100 complaints per day. This increase is primarily attributed to significant delays in processing everyday insurance claims, leaving many policyholders frustrated and financially vulnerable. - read more
Aon Australia has been honored with the Australian and New Zealand Institute of Insurance and Finance's (ANZIIF) Large Broking Company of the Year award for the third consecutive year. This accolade reflects Aon's unwavering commitment to delivering innovative solutions and exceptional service within the Australian insurance landscape. - read more
In a significant development for the Australian travel insurance market, Cover-More, a subsidiary of Zurich's Cover-More Group, has entered into a strategic partnership with global brokerage firm Aon. This collaboration designates Cover-More as the exclusive provider of travel insurance products to Aon's Australian retail customers and employees. - read more
The Australian Travel Industry Association (ATIA) is actively campaigning to secure the permanent right for travel agents, tour operators, and accredited travel businesses to sell travel insurance at the time of booking. This initiative follows an exemption granted in 2021, which is set to expire in October 2026. - read more
Life insurance is a crucial part of any comprehensive financial plan, providing peace of mind that your loved ones will be financially secure in the event of your passing. - read more
Life insurance and estate planning are critical components of financial security. They ensure that your loved ones are protected financially when you are no longer around. By understanding these tools, you can take significant steps to secure your family's future. - read more
When it comes to life insurance, a pre-existing condition refers to any medical condition or illness that you have been diagnosed with before applying for a life insurance policy. - read more
Life insurance can seem complex at first, but understanding the basics can help demystify this important financial product. At its core, life insurance is a contract between you and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon your passing, in exchange for premium payments. - read more
Life insurance is an essential safety net for families, providing financial security when it's needed the most. As your family grows, the importance of having a well-structured life insurance policy becomes even more critical. In the busy lives we lead today, it’s easy to overlook this crucial aspect of financial planning. However, ensuring your coverage meets your family's evolving needs is vital. - read more
Start Here !
Apply now for your free Insurance assessment and price comparisons!
Knowledgebase
Insurance Claim: Notification to an insurance company requesting payment of an amount due under the terms of the policy.
