A misrepresentation about medical history may void a disablity insurance policy. Even if the misrepresentation is not related to the disabling condition.

Insured's appeal of a finding that his long-term disability policy was void for material misrepresentation was dismissed.

Fernandes v. RBC Life Insurance Co., [2009] O.J. No. 5240, December 8, 2009, Ontario Court of Appeal, E.A. Cronk, S.E. Lang and R.G. Juriansz JJ.A.

The Plaintiff Insured appealed the dismissal of his action against the Defendant Insurer. The Insured held a long term disability policy with the Insurer. The Insured subsequently became disabled as a result of meningitis. He applied for long term disability benefits but his application was rejected by the Insurer who took the position that the Insured had materially misrepresented his medical history on the initial questionnaire.

The trial judge found that the policy was void ab initio because the Insured had not disclosed material facts. In particular, the Insured had not disclosed the identity of his attending physician or his consultation with that physician four or five months prior to the date of the insurance application regarding lumbar pain. The trial judge found that had the Insured not misrepresented his medical history, the coverage offered would have been subject to full exclusions for back and hip related ailments. The Insured's appeal, which was on the basis that the trial judge had committed errors of facts, was dismissed.

This case was originally summarized by Cameron B. Elder and originally edited by David W. Pilley.

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Life insurance - February 4, 2010 5:30 PM

Interesting. I dealt with Guaranteed to issue disability for years, with only 2 qualifying questions for the injury portion. So those types of situations never came up. However, for illness, although it was underwritten, I was always careful about getting full disclosure before recommending it to a client, just in case the situation above that you described came up. I am curious if RBC refunded the premiums because of a misrepresentation in material facts. If those facts were admitted at time of appplication, the policy should never have been accepted.

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