Forgot to Disclose a Medical Condition on Insurance? What to Do

The decision: fix it now, not at claim time

Most people who search this question are hoping the answer is that it does not matter. Sometimes it does not. But you cannot know that until the insurer reassesses, and the only safe way to find out is to put the correction in writing yourself.

Here is why timing is everything. When you volunteer a correction, the insurer looks at it as an underwriting question: would we have offered this cover, and on what terms, had we known? The usual outcomes are no change, an exclusion for the condition, or a higher premium. When the same information surfaces during a claim, the insurer is looking at it as a reason not to pay. Investigators will request your full Medicare and PBS history and your GP file, compare them line by line with your application, and the question becomes whether the policy should ever have existed. You are then arguing from the back foot, usually while sick, injured or grieving.

Correcting voluntarily also builds the record that matters most if anything is ever disputed: that you were honest, that the omission was a mistake, and that you fixed it as soon as you realised. That record is very hard to build after a claim has been lodged.

What the duty actually is in Australia

Australian insurance law has long required you to be honest with your insurer before a policy starts. The older version was called the duty of disclosure: you had to tell the insurer everything you knew, or a reasonable person would know, was relevant to its decision. That version still applies to some older policies and to many business policies.

For consumer insurance policies taken out or varied since the reforms that commenced in October 2021, the duty is framed differently. You now have a duty to take reasonable care not to make a misrepresentation when answering the insurer's questions. In practical terms:

• The insurer must ask clear, specific questions. It cannot rely on you volunteering things it did not ask about.
• You must answer those questions honestly and carefully, to the best of your knowledge.
• Whether you took reasonable care is judged against how a reasonable person in your circumstances would have answered, taking into account how clear the question was, what explanatory material the insurer gave you, whether a broker or agent was involved, and any particular circumstances the insurer knew about, such as language or literacy difficulties.

The duty runs up to the moment the policy starts, and again whenever you renew, extend, vary or reinstate it. If something changes between submitting the application and the policy commencing, for example a specialist referral or a new diagnosis, you need to tell the insurer before the cover begins.

Genuinely forgetting is not fraud. Fraud means knowingly giving a false answer or deliberately leaving something out to get cover you would not otherwise have been offered. An honest mistake is a civil matter between you and the insurer, and the law limits the insurer's response to what it would have done had it known the truth.

What the insurer can do if you got it wrong

The remedy depends on how the mistake happened and what difference it would have made. Broadly:

• You took reasonable care but the answer was still wrong. The insurer generally has no remedy. A reasonable mistake, such as not knowing a test result or misunderstanding an ambiguous question, is not a misrepresentation at all.
• The mistake was careless but not dishonest. The insurer can put itself in the position it would have been in had it known. That might mean varying the policy, adding an exclusion for the condition, applying a premium loading and asking you to pay the difference, or reducing the benefit. If it would never have offered cover at all, it can avoid the policy from the start, which means treating it as if it never existed and usually refunding premiums.
• The misrepresentation was fraudulent. The insurer can avoid the policy from the start regardless of whether the condition had anything to do with a claim, and may not refund premiums.

The important point is that the insurer must show what it would actually have done. It is not enough to say the information was relevant. If the insurer's own underwriting guidelines show it would have accepted you with an exclusion, then an exclusion is the limit of what it can impose, and a claim unrelated to the excluded condition should still be assessed on its merits.

The three year rule for life insurance

Life insurance, which includes most income protection, trauma and TPD policies, has an extra layer of protection under the Insurance Contracts Act.

Where the non-disclosure or misrepresentation was not fraudulent, the insurer can only avoid the policy within three years of the policy starting. After three years it cannot cancel a life policy for an honest or careless mistake. What it can still do after that point is vary the contract so it reflects what you actually paid for, most commonly by reducing the sum insured to the amount the premium you have been paying would have bought had the true position been known. Fraudulent non-disclosure can be acted on at any time.

This matters in two ways. If your policy is less than three years old, correcting the record now is doubly worthwhile because you are still inside the window where avoidance is possible, and a voluntary correction is far more likely to end in an exclusion or loading than a cancellation. If your policy is more than three years old, you should still correct the record, but you can do so knowing the policy itself is not at risk for an honest mistake.

Note that the three year clock restarts if you take out a new policy, and can be affected if you materially increase cover, since the increase is underwritten afresh. If you are thinking about replacing a policy, get advice before you cancel anything, because you can lose the protection of time you have already banked.

Life and income protection: the things people most often leave off

Life and income protection applications ask detailed health questions, and these are the applications where omissions are most often found at claim time because the insurer will obtain your full medical history. Common oversights include:

• Mental health. A short course of counselling, a mental health care plan from a GP, a period on antidepressants years ago, or stress leave from work. Many people do not think of these as "conditions" but the questions usually ask about any consultation, treatment or symptoms.
• Musculoskeletal history. Back pain, a physio referral, a knee injury from sport. These are the most common income protection claims, so insurers look for them closely.
• Blood pressure, cholesterol, blood sugar. Results your GP described as "a bit high, let us watch it" often count as a diagnosed condition or at least an abnormal test result.
• Family history. Applications commonly ask whether a parent or sibling had heart disease, stroke, cancer, diabetes or certain other conditions before a stated age. A parent's heart attack in their fifties is exactly what these questions are looking for.
• Pending tests and referrals. If you have been referred to a specialist or are awaiting results, that must be disclosed even if nothing has been diagnosed yet.
• Smoking and alcohol questions, and occupational or sports questions that are not medical but are underwritten in the same way.

Once a life or income protection policy is in force, you generally do not need to tell the insurer about conditions that develop later. The duty is about the position at the time of application. So if you are worried about a diagnosis that came after your policy started, that is usually not a disclosure problem at all. Check your policy, though, because some policies have specific notification requirements, particularly around changes in occupation or if you stop working.

Travel insurance: where most "invalid policy" stories come from

Travel insurance is where people are most often caught out, because it is bought quickly, online, and the medical questions are easy to click past. The headline you may have read, that your travel insurance could be invalid if you do not disclose a condition, comes from exactly this situation. The things that commonly go undeclared:

• Recent GP visits and investigations. Many policies ask whether you have seen a doctor, had tests, or been referred to a specialist within a stated period before purchase. A check-up that led to a scan counts.
• Medication changes. A new prescription, a dose change or a condition that is "controlled" by medication is usually still a condition the insurer wants to know about. Automatically covered conditions in many policies are only covered if they meet the policy's specific definition, which often requires that medication has not changed within a certain time.
• Conditions of a travelling companion or relative. If your partner, a travelling companion or a close relative at home has a serious condition, and your trip is cancelled because of it, insurers commonly exclude claims arising from conditions you knew about when you bought the policy. Some policies let you declare a relative's condition and pay to cover it. Many do not, and you need to know which applies before you travel.
• Pregnancy, mental health and recent surgery, which many policies treat separately from other pre-existing conditions.

The good news with travel insurance is that it is usually the easiest to fix. Most policies have a cooling off period after purchase during which you can cancel for a full refund if you have not started travelling or made a claim. Within that window you can cancel and rebuy with the condition declared, or simply contact the insurer and ask to add the condition, which may involve a medical assessment and an extra premium. Outside the cooling off period you can still declare the condition; the insurer will tell you whether it can be covered, excluded or whether the policy needs to be reissued. Do this before departure. Once you are overseas and need treatment, the conversation becomes a claim investigation.

One more trap: if your health changes between buying the policy and departing, many travel policies require you to tell the insurer. Read the PDS section on changes in health before you leave.

Health insurance: a waiting period, not a voided policy

Private health insurance in Australia works differently and is the one area where a forgotten condition is rarely a crisis. Australian health funds are community rated, which means they cannot refuse to cover you or charge you more because of your health. There is no medical underwriting at application, so there is usually no disclosure form to get wrong.

Instead, pre-existing conditions are handled through waiting periods. If you need hospital treatment for a condition that existed, or had signs or symptoms that a reasonable GP would have recognised, in the period before you joined or upgraded, the fund can apply a pre-existing condition waiting period before it pays for that treatment. The fund's medical adviser, not your own doctor, makes that assessment based on your history. Once the waiting period is served, the condition is covered on the same terms as anything else.

So if you have joined a fund or upgraded your cover and are now worried about a condition you did not mention, the question is not whether your policy is valid but whether a waiting period applies to that treatment. Ask the fund in writing before you book a procedure. The risk is a large unexpected bill, not a cancelled policy.

What to send the insurer

Keep it short, factual and in writing. Email to the policy administration or underwriting address shown on your policy documents, or use the insurer's secure online portal. A phone call is not enough, because you want a dated record that you volunteered the information and what the insurer said in reply. If you went through a broker or adviser, send it to them and ask them to lodge it with the insurer and confirm when it has been done.

Include:

• Your name, policy number and date of birth.
• A clear statement that you are correcting your application and want the policy reassessed.
• The condition or event, in plain language, including any diagnosis you were given.
• Dates: when symptoms started, when you first saw a doctor, when you were diagnosed, when treatment started and stopped, and your current status.
• The treating doctor or practice, and any specialist involved.
• Any medication, including dose and whether it has changed.
• Which application question it relates to, if you can identify it, and a short honest explanation of why it was missed, for example you misread the question or did not think a GP visit for a minor issue counted.
• A request for written confirmation of how the policy will be treated, including any exclusion, loading or change to the sum insured, the effective date, and confirmation that the policy otherwise remains in force.

Do not minimise, and do not add things that are not true to soften it. Give the facts and let the insurer assess them. Keep a copy of everything you send and everything they send back. If the insurer asks for a medical report or authority to contact your doctor, that is normal.

If the insurer comes back with an exclusion or loading you think is too harsh, you can ask for its reasons and the underwriting basis, and you can ask a broker whether other insurers would treat the condition more favourably. Do not cancel the existing policy until replacement cover is confirmed in writing.

If a claim has already been declined for non-disclosure

If you are reading this because a claim has been refused, or the insurer has written to say it is avoiding your policy, you still have a clear path.

1. Get the decision in writing with reasons. Ask the insurer to identify exactly which question it says was answered incorrectly, what information it relied on, and what it says it would have done had it known. Ask for a copy of the application as you completed it and any recording or transcript if it was done by phone.
2. Check the basics. Was the question actually clear? Was your answer actually wrong, or is the insurer reading the question more broadly than a reasonable person would? Did you have the information at the time? Was a broker or agent filling in the form? Is the policy a life policy more than three years old?
3. Ask whether the condition is connected to the claim. Under the current consumer duty, if the insurer would have accepted you with an exclusion for that condition, the correct remedy is usually to apply the exclusion, not cancel the policy, and a claim for something unrelated should still be assessed.
4. Lodge an internal dispute resolution complaint. Every insurer has an IDR process. Put your complaint in writing, set out why you believe the decision is wrong, and attach any medical evidence that supports your position, such as a letter from your GP explaining the nature of the condition or confirming it was minor or resolved.
5. Escalate to AFCA. If IDR does not resolve it, or the insurer does not respond within its required timeframe, you can take the complaint to the Australian Financial Complaints Authority. AFCA is free for consumers. It will ask the insurer to produce its underwriting guidelines and evidence of what it would have done. There are time limits for lodging with AFCA, so do not sit on a decision.

Innocent non-disclosure cases are regularly resolved at IDR or AFCA by reinstating the policy with an exclusion for the undisclosed condition, and then assessing the claim on that basis. Outcomes are far worse where the evidence suggests the omission was deliberate, where the condition is directly connected to the claim and the insurer can show it would have declined cover outright, or where the person gives shifting explanations. Consistency and honesty matter at every step.

Common mistakes to avoid

• Waiting to see if it comes up. It comes up at claim time, which is the worst possible moment.
• Phoning and leaving it there. Without a written record you cannot prove you disclosed, and a call centre note may not reach underwriting.
• Cancelling and quietly reapplying elsewhere without disclosing. This turns an innocent mistake into a deliberate one and resets the three year clock on a life policy.
• Treating "controlled" or "resolved" as "not a condition". If the question asks whether you have ever had, been treated for or consulted a doctor about something, a resolved condition still needs a yes.
• Assuming a broker filled it in correctly. You sign the declaration. Read the completed form before it goes in, and keep a copy.
• Not reading the automatically covered conditions in travel policies. They often come with conditions about medication, hospital admissions and time since diagnosis that are easy to miss.
• Giving a different explanation to the investigator than you gave in your correction. Keep one accurate account and stick to it.

Why getting matched with a broker or claims adviser helps

Disclosure problems are a small area of insurance where expert help changes outcomes. A broker who deals with life and income protection underwriting every week knows how different insurers treat anxiety, back pain, a family history of heart disease or a raised blood sugar result, and can often get an informal pre-assessment so you know what to expect before you put anything in writing. If your existing insurer responds with a heavy loading or exclusion, a broker can tell you whether that is the market norm or whether it is worth moving.

If a claim has already been declined, a claims adviser can read the application, the decline letter and the underwriting evidence, tell you honestly whether the insurer's position holds up, and build the IDR and AFCA submission around the points that actually decide these cases: the clarity of the question, reasonable care, the connection between the condition and the claim, and what the insurer would really have done. Use the form on this page to tell us what happened, and we will match you with someone who handles this kind of problem.