Material Facts

Material facts are the pieces of information that are essential for an insurer to accurately assess risk and decide whether to approve an application, determine premiums, or apply exclusions. These facts include any details that could influence the insurer’s decision to issue coverage or the terms of that coverage. Examples include medical conditions, medications, family health history, lifestyle habits, and participation in hazardous activities.

‍

When applying for health, life, or disability insurance, applicants are legally required to disclose all material facts truthfully and completely. Failure to disclose or misrepresent a material fact can result in the insurer denying a claim, canceling the policy, or declaring it void from inception. The obligation to disclose material facts applies both during the initial application and when making changes to existing coverage.

‍

Example:

‍

If you apply for life insurance and do not disclose that you were recently diagnosed with high blood pressure, that omission is considered a failure to disclose a material fact. If you die from a related condition within the contestability period, the insurer may deny the death benefit.

‍

What to Watch For:

‍

Be honest and thorough when answering all questions on insurance applications. If you are uncertain whether something is relevant, disclose it and let the insurer decide. Keep copies of your completed application and correspondence. Once a policy is issued, review the information carefully to confirm that all material facts were recorded accurately.