Based on the insurance principle of Utmost Good Faith, insurance companies assume that customers provide precise, true and complete information of their health status when applying for medical insurance. However, once this principle is violated, insurance companies have the right to repudiate the policy. Below is an example illustrating this principle.

Mr. Wong underwent a medical check-up when he took out medical insurance two years ago. He told the medical examiner that he had hypertension in the past. After the check-up, the medical report showed that there was a left atrial enlargement. After risk assessment, the insurance company added a 50% premium loading on Mr. Wong’s medical insurance policy.

Three months ago, Mr. Wong was diagnosed with bilateral cataract. Cataract extraction and intraocular lens implantation was performed. After discharge from hospital, Mr. Wong submitted his claim for medical expenses to his medical insurance company, but was rejected on the ground of non-disclosure of material information.

Why did Mr. Wong’s medical insurance company reject his claim?

In fact, Mr. Wong was diagnosed as suffering from posterior vitreous detachment (PVD) three years prior to the medical insurance application. He alleged that his attending doctor never told him that he was suffering from any eye disease and pointed out that his suffering of PVD was not related to the bilateral cataract.

However, the Complaints Panel found from the record of Mr. Wong’s attending doctor that Mr. Wong was diagnosed with eye disease and was recommended to have periodic check-ups. Because Mr. Wong's non-disclosure of this information would affect the underwriting decision of the insurance company, the Complaints Panel agreed with the insurance company's decision to reject Mr. Wong's medical expenses claim and repudiate his medical insurance policy.

To avoid unnecessary disputes and in order to enjoy comprehensive coverage, customers should disclose all medical history when applying for medical insurance.

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