Think You’re Covered? Why Full Disclosure Is The Make-Or-Break Moment In Insurance Claims

According to news reports, a man paid Rs 50,000 as a premium, yet his claim was denied when his mom fell ill. The insurance company cited the reason that proper disclosures were not made when it took the insurance policy.

When you take an insurance policy, the onus is on you to make proper disclosures. In fact, the insurance company is not mandated to do proper checks before it issues a policy, whether it is life or health insurance.

To uphold the principle of utmost good faith (Uberrima Fides), an applicant must fully disclose information when applying for insurance. An applicant needs to provide mandatory disclosures, which include the following.

What All To Disclose Before Applying For An Insurance Policy 

Medical History: “All current and prior medical conditions, including but not limited to major illnesses (diabetes, high blood pressure, heart disease, thyroid problems, asthma, etc.) and/or prior surgeries required to treat those conditions and/or hospital stays and/or ongoing medical treatment and/or any medications used,” says Arun Ramamurthy, co-founder, Staywell.Health.

Lifestyle Habits: Any habitual activity that may adversely impact an applicant’s health (smoking, tobacco, alcohol, or other substance use).

Family Medical History: Any major inherited medical condition (cancer, heart disease, and diabetes).

Details On Previous Insurance: Current health/life insurance policies as well as any claims filed and/or amounts refused, refinanced, and/or canceled.

Occupation And Exposure To Risk: Working in a job that is considered dangerous, traveling frequently, and/or any high-risk activities (extreme sports).

Financial Information (For life Insurance Purposes): Need information regarding income and any other work-related expense and/or liabilities to determine whether or not the applicant has insurable interest in themself.

“Failure to disclose relevant material facts or providing false information about relevant material facts could result in rejection of claim or claims,” says Ramamurthy.

“In fact, non-disclosure or partial disclosure remains one of the most common reasons for claim disputes. Even a seemingly small omission can create complications at the time of claim assessment,” says Anita Teli, head of compliance, Probus.

Documentary Evidence Is A Must 

Disclosures should be backed by documents wherever applicable. Basic KYC (PAN, Aadhaar, address proof), income proof (for a higher sum assured in life insurance), previous policy copies, and past medical records should be kept handy. “For health policies, medical reports, prescriptions, and diagnostic records help ensure transparency at underwriting and smooth claim settlement later. Keeping copies safely stored also helps avoid delays during claim processing,” says Teli.