Concealment

Definition:

When the insured hides any information or does not disclose the relevant and crucial facts to the insurer is called concealment. The act can be intentional or unintentional.

Description:

Concealment in insurance can be declared as a fraud by the insurance company. When buying the insurance, the life insured confirms not to hide (conceal) any critical fact. The life insurance policy is subjected to cancellation if the life insured fails to do so. Often, the insured commits fraudulent concealment to get the insurance company's benefit.

Insurance is an agreement or contract signed based on utmost good faith. All the material facts must be declared to strengthen the insurance contract.

Example:

Ashok did not declare his pre-existing illness while taking the term insurance plan. But when he died and his dependents applied for the claim, they were denied the claim amount/payout on the basis of concealment. The insurance company found out that Ashok withheld the information about his pre-existing medical condition.

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ADV/5/22-23/289