A widower has failed to win a life insurance payout because his wife did not declare ongoing alcohol induced pancreatitis. 

While the policyholder, Mrs G, did not die from the pancreatitis, TAL Life Limited successfully argued that it would not have issued a policy for the deceased if she had been honest about her full medical history. 

Mrs G’s widower took the decision to the Australian Financial Complaints Authority (AFCA), arguing that the insurer should pay the claim because Mrs G died from causes unrelated to the conditions she made misrepresentations about. The ruling does not say how Mrs G died. 

The hearing was told that in February 2014, Mr G had called to inquire about funeral insurance and a life insurance policy for his wife and the insurer had later spoken to her, covering off her medical history. 

While she disclosed that she had her gall bladder removed she had not told the insurer that she had ongoing issues with alcohol-induced pancreatitis which had led to hospitalisation several times and as recently as a month before taking out the policy.  

Pancreatitis is an inflammation of the pancreas, a gland that secretes enzymes and hormones. Heavy alcohol consumption is a cause of pancreatitis. 

The insurer had asked Mrs G if she had, in the previous five years, been in hospital, or seen a doctor or other health professional for any other condition that lasted more than 14 days or been prescribed medication for more than 14 days. She said she had not. 

Further, she said “No” when asked if she had been advised by her doctor to stop drinking or to cut back on alcohol. 

TAL rejected the claim and avoided the policy, saying Mrs G, then aged 41, had made “fraudulent misrepresentations about her health” when applying for the policy. 

AFCA found that insurer could avoid the policy because Mrs G had made misrepresentations about her medical history, knowing the answers were false. 

“The insurer was entitled to avoid the policy and deny the complainant’s claim. If the insurer has not already done so, it must refund insurance premiums paid for the policy,” AFCA ruled. 

Click here to read the full ruling.