"Just Hyperlipidemia" - Contract Termination When Joining Insurance Without Disclosure

Financial Supervisory Service Discloses Cases of Breach of Pre-Contract Disclosure Obligations Including Hospitalization for Enteritis

A man in his 50s, Mr. Kim, underwent spinal disc surgery and was treated for prostatitis two months ago, and was diagnosed with hyperlipidemia. He recently purchased insurance without disclosing his history of hyperlipidemia diagnosis to the insurer. Later, after being diagnosed with cerebral infarction, he filed a claim for insurance benefits, but the payment was denied. The insurance contract was also canceled. This was because he failed to truthfully disclose the 'disease confirmation diagnosis within 3 months,' which is an obligation to notify before the insurance contract.

The Financial Supervisory Service disclosed on the 27th common complaints related to the obligation to notify that frequently occur before disease and injury insurance contracts.

Seoul Yeouido Financial Supervisory Service building. Photo by Younghan Heo younghan@

Disease confirmation diagnoses, suspected disease findings, and additional examination (re-examination) requirements from health checkup results are also subject to the obligation to notify. Mr. Lee received a health checkup three months before purchasing insurance and was given a suspected diagnosis of diabetes. However, since he had no history of treatment such as diabetes medication, he did not take it seriously. He also answered 'No' to the question about suspected disease findings when applying. After purchasing insurance, he was diagnosed with diabetes and filed a claim, but the payment was denied and the contract was canceled. This was because he did not disclose the suspected disease findings that occurred three months before the insurance purchase.

Medical history and treatment for the top 10 major diseases such as cirrhosis, hypertension, diabetes, and angina are also subject to the obligation to notify. Mr. Choi was diagnosed with cirrhosis (liver cirrhosis) just before purchasing insurance. However, he answered 'No' to questions about medication or diagnosis related to the top 10 diseases within the past 5 years when applying. After purchasing insurance, he was diagnosed with liver cancer, but since it was confirmed that he did not disclose his history of cirrhosis, the insurance payment was denied. It should be noted that if the contract is canceled due to violation of the obligation to notify, most of the paid premiums cannot be refunded.

When purchasing insurance via telephone marketing (TM), a large amount of information and questions are delivered within a limited time, so special attention should be paid to answering the obligation to notify questions. Mr. Lee had been hospitalized for enteritis within 5 years before purchasing insurance. However, he judged enteritis to be a minor illness and did not provide any particular answer to the obligation to notify questions (such as hospitalization within 5 years) from the telephone counselor and purchased insurance. After the history of enteritis hospitalization was confirmed, the insurance contract was canceled. If you are unsure or cannot recall accurately when answering obligation to notify questions, you should request an additional call and confirm the facts before responding.

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