Joanna applied for a non-medical life insurance. Joanna did not inform the insurer that one week prior to her application for insurance, he was examined and confined at St. Luke’s Hospital where she was diagnosed for lung cancer. The insured soon thereafter died in a plane crash. Is the insurer liable considering that the fact concealed had no bearing with the cause of death of the insured? Why?
No. The concealed fact is material to the approval and issuance of the insurance policy. It is well settled that the insured need not die of the disease she failed to disclose to the insurer. It is sufficient that his nondisclosure misled the insurer in forming his estimate of the risk of the proposed insurance policy or in making inquiries.