The legal aspects of life insurance : implications of non-disclosure and misrepresentation

• Main Authors: Ng, Irene Bee Khim, Ong, Li Shan, Wee, Chiew Pheng
• Other Authors: Nanyang Business School
• Format: Final Year Project
• Language: English
• Published: 2014
• Subjects: DRNTU::Business
• Online Access: http://hdl.handle.net/10356/59690
• Institution: Nanyang Technological University

Life insurance contract is a contract of utmost good faith. All parties of the contract is expected to act in good faith. However, the life insurance industry has been facing the problem of non-disclosure and misrepresentation of facts in the insurance contract ever since its existence. The reasons behind this include the lack of knowledge or intentional withholding of relevant information by proposer. There is very little the insurance companies can do to protect themselves from such dishonest act. Furthermore, it is difficult for the company to judge whether the withholding of information is fraudulent or innocent. The cost of investigating such claims is often not justifiable. The insurance companies will often think twice about rejecting claims as it will affect the image of their companies and the industry as a whole. As a result, insurance companies often have to resort to ex-gratia payment.