, PLEASE USE THIS DOCUMENT AS A GUIDE ONLY
Question 1
1. Velly applies for insurance on his own life. He is unaware of the fact that he is suffering from
a terminal disease. Consequently, he does not disclose this fact to the insurer. Also, on the
proposal form for insurance, the insurer does not ask him any questions about his health. Would
the insurer be able to avoid liability for a claim on the contract if it appears, after Velly’s death,
that the insured had been suffering from such a disease at the time when he applied for the
insurance cover, and that the disease was the cause of his death.
In the case where Velly applies for life insurance but fails to disclose his terminal disease, the insurer
could potentially avoid liability depending on the nature of the misrepresentation or non-disclosure.
The key issue here is whether Velly’s failure to disclose his health condition constitutes a material
misrepresentation. The general rule in insurance law is that non-disclosure or misrepresentation of
material facts may render the contract voidable. However, it is important to consider the duty of
disclosure and whether the insured, in this case, was aware of the disease. According to South
African insurance law, an insured person is typically not required to disclose facts they are unaware
of, even if those facts are material to the risk assessment of the insurer. This is supported by the
principle that one cannot disclose what one does not know. Therefore, in Velly’s case, the fact that
he was unaware of his terminal disease means he did not have an obligation to disclose it1 .
Additionally, in situations where an insurer does not ask questions about the applicant's health, the
duty of disclosure is limited. The insured would generally not be liable for failing to disclose a
condition that was not explicitly inquired about in the application form. Hence, the insurer would
likely be unable to avoid liability unless there was a specific question regarding the insured's health
or the insured had deliberately misrepresented or withheld critical information2 .
In conclusion, as Velly was unaware of his disease and the insurer did not inquire about it, they
would likely be unable to avoid liability for the claim, even if the disease caused his death. The
materiality of the disease, while important, does not override the fact that the non-disclosure was not
intentional or knowingly omitted3 .
1: (LML4805, Study Guide, p. 12)
2: (LML4805, Study Guide, p. 14)
3: (LML4805, Study Guide, p. 15)
Question 1
1. Velly applies for insurance on his own life. He is unaware of the fact that he is suffering from
a terminal disease. Consequently, he does not disclose this fact to the insurer. Also, on the
proposal form for insurance, the insurer does not ask him any questions about his health. Would
the insurer be able to avoid liability for a claim on the contract if it appears, after Velly’s death,
that the insured had been suffering from such a disease at the time when he applied for the
insurance cover, and that the disease was the cause of his death.
In the case where Velly applies for life insurance but fails to disclose his terminal disease, the insurer
could potentially avoid liability depending on the nature of the misrepresentation or non-disclosure.
The key issue here is whether Velly’s failure to disclose his health condition constitutes a material
misrepresentation. The general rule in insurance law is that non-disclosure or misrepresentation of
material facts may render the contract voidable. However, it is important to consider the duty of
disclosure and whether the insured, in this case, was aware of the disease. According to South
African insurance law, an insured person is typically not required to disclose facts they are unaware
of, even if those facts are material to the risk assessment of the insurer. This is supported by the
principle that one cannot disclose what one does not know. Therefore, in Velly’s case, the fact that
he was unaware of his terminal disease means he did not have an obligation to disclose it1 .
Additionally, in situations where an insurer does not ask questions about the applicant's health, the
duty of disclosure is limited. The insured would generally not be liable for failing to disclose a
condition that was not explicitly inquired about in the application form. Hence, the insurer would
likely be unable to avoid liability unless there was a specific question regarding the insured's health
or the insured had deliberately misrepresented or withheld critical information2 .
In conclusion, as Velly was unaware of his disease and the insurer did not inquire about it, they
would likely be unable to avoid liability for the claim, even if the disease caused his death. The
materiality of the disease, while important, does not override the fact that the non-disclosure was not
intentional or knowingly omitted3 .
1: (LML4805, Study Guide, p. 12)
2: (LML4805, Study Guide, p. 14)
3: (LML4805, Study Guide, p. 15)
