Both insurers and policy holders should live up to society’s expectations. Members of society expect both of them to demonstrate good faith. For the policy holder, a demonstration of good faith should include disclosure of all relevant facts, when applying for insurance coverage.
The above facts apply to an application for any kind of policy that has been offered by a company that sells life, health or disability insurance. Insurers use the information on such an application to determine the rates and fees that will be charged the new policy holder. Hence, the applicant should answer all the questions and share all the pertinent information.
What could happen if some information gets withheld?
The insurer trusts the applicant’s show of good faith, while conducting a review of the submitted application. Later, though, if a policy holder submits a claim, the insurance company will investigate that same claim. During the investigation it might discover an inaccuracy in the application, the one that the company had reviewed and accepted earlier. Following that discovery, the existing policy could be voided, bringing a quick end to any claim.
Couldn’t the person that has lost a policy try to buy a new one from a different insurance company?
That person could make an effort to buy a new policy, but there is no guarantee that he or she would be successful. The company that had been deprived information it really needed could share with other companies the name of the policy holder that had acted in bad faith. If that becomes the case, then the person that tried to trick one insurance company will get rejected by all of them.
When such rejection becomes a real problem
Like banks, insurance companies will not reject a possible customer forever. The man or woman that was rejected in the past should expect to be welcomed as a customer following the passage of a sufficient amount of time. Still, if you hope to use a disability insurance policy, you do not have lots of time.
For that reason, it makes no sense to conceal any facts about a pre-existing condition. In fact, be truthful in all communications with the insurer, following a disabling accident. Make sure that no one else has shared some incorrect information. If they have, explain what happened and apologize.
If the accident victim has been denied the claim, it is important that they discuss the details with an injury lawyer in Milton and again file for the compensation.