When applying for life insurance, Merlin is asked if she has been treated for any illness in the past five years, to which her answer is 'no'. However, she does not inform the insurer that she has experienced chest pains recently, for which she has not sought any medical treatment. In this case, the insurer may prove a case of _____ and avoid the insurance policy.

Question

Quizplus · Accepted Answer

The situation described here is a case of concealment, which is the intentional withholding of information that is material to the risk. The fact that Merlin did not disclose her recent chest pains is material information that could affect the insurer's decision to issue the policy or the premium charged for the policy. As a result, the insurer may avoid the insurance policy based on this concealment. Wagering refers to an agreement in which the payout depends on the outcome of an uncertain event, and it is not relevant here. Assignment and subrogation refer to legal rights in insurance contracts, which are not applicable here. No-fault refers to a type of insurance system in which each party's own insurance pays for their own damages regardless of who is at fault, and it is also not applicable here.

When Applying for Life Insurance, Merlin Is Asked If She