Duty of Disclosure

Before you enter into a life insurance contract, you have a duty to tell the insurer anything that you know, or could reasonably be expected to know, that may affect the insurers decision to insure you and on what terms.


You have this duty until your policy is issued.


You have the same duty before you extend, vary or reinstate any insurance contract.


You do not need to tell the insurer anything that:

  • reduces the risk to the insurer; or
  • is common knowledge; or
  • the insurer should know; or
  • the insurer specifically waives as a notification requirement.


If the insurance is for the life of another person and that person does not tell the insurer everything he or she should have, this may be treated as a failure by you to tell the insurer something that should have disclosed.

If you do not tell us something

In exercising its rights, the insurer may consider whether different types of cover can constitute separate contracts of life insurance. If they do the following rights may be applied separately to each type of cover or to all the covers. If you do not tell the insurer anything you should have disclosed, and the insurer would not have insured you if you had disclosed it, the insurer may avoid the contract within three years of commencement.


If the insurer chooses not to avoid the contract, they may, at any time, reduce the amount you were insured for. This would be worked out using a formula that takes into account the premium that would have been payable if you had disclosed everything you should have. The insurer may only exercise this right within three years of entering into the contract. After 3 years in force, the Insurer can still have the same remedies, but will have to show the non-disclosure was intentional (and therefore fraudulent).


If the insurer chooses not to avoid the contract or reduce the amount you were insured for, they may, at any time vary the contract in a way that places them in the same position they would have been in if you had disclosed everything you should have.


If your failure to tell the insurer relevant information is fraudulent, they may at any time in the future refuse to pay a claim and treat the contract as if it never existed.