Non-disclosure: your questions answered

What is non-disclosure?

Non-disclosure is the failure of the client to advise Irish Life of any material fact that could have an impact on the terms offered to them.

What is a material fact?

A material fact (relevant information) includes anything which a reputable insurer would regard as likely to influence the assessment and acceptance of an application for insurance.

At what stage must the client disclose all material facts?

All material facts should be disclosed on the application form. If for some reason this is not the case, all relevant information should be provided before the plan issues. If an applicant's health changes after the application has been accepted, the client doesn't have to advise Irish Life of the change, up to a maximum of six months between acceptance and issue.

How does Irish Life assess cases where there is non-disclosure of material facts?

Once we have been made aware of information that was not supplied to us during the course of an application, we will try to assess this without cancelling the plan. We may need to request information from the client(s) and/or their GP, or they may have to attend a medical examination. There will, unfortunately, be situations where it's apparent that the original terms offered are not suitable in light of the new information. In this case, we will cancel the plan from the start date and ask the client(s) to reapply for cover. We will advise all parties who hold an interest in the plan of our decision to cancel the cover.

How does Irish Life highlight the importance of full disclosure?

Our literature contains warnings on the importance of full disclosure throughout. At the first instance, within the application form or CAB, the clients are asked to sign a declaration which highlights the need to have answered the questions fully. The application form is then processed by Irish Life. Following this, the client will receive a copy of the questions as they answered them, and within this communication lies another warning on the impact of non-disclosure. Clients are also advised at this stage that should their health change between the application date and the date their cover is accepted, they must let us know as failure to do this may result in a claim being refused. Finally, once the client's application for cover has been accepted and terms issued, there is a final warning within their welcome pack.

What is the main impact of non-disclosure?

The main impact of non-disclosure is that it may lead to a claim being refused. Obviously this will be of great concern to clients but in situations of non-disclosure we must adhere to the policy terms and conditions. As detailed above, clients are given ample opportunity to make us aware of all relevant facts. Remember, the non-disclosure does not have to be related to the cause of the claim.

What can financial advisors do to help prevent non-disclosure?

Go through all the health questions and answers with your clients.
Do not allow clients to be flippant in answering medical questions.
Point out the importance of the smoking question.
Go through the warning contained in the application form with clients.
Fully advise the clients of their duty to disclose any changes in health before their cover is accepted.
If clients are not sure if something is relevant, tell us anyway.

Irish Life's underwriting staff is always available to discuss any application with you. Please contact us on 01 7041888 or email at ask.underwriting@irishlife.ie.