Policyholder's Critical Illness Insurance Claim Rejected, Court Rules: Must Pay!

Beijing Financial Court recently held an open court session at the Financial Street Circuit Court to hear a second-instance case of health insurance contract dispute and announced the verdict in court.

According to the court hearing, Ms. Huang purchased a critical illness insurance policy for herself. Several years later, Ms. Huang was diagnosed with malignant tumors. An insurance company refused to pay claiming that Ms. Huang did not disclose her family history of tumors at the time of application. Ms. Huang sued the insurance company in court. The first-instance court supported Ms. Huang’s claim. Dissatisfied, the insurance company appealed to the Beijing Financial Court. After an open court hearing, the Beijing Financial Court found that the insurance company did not ask clear and effective questions, and Ms. Huang did not violate her duty of truthful disclosure. The insurance contract is valid. The court upheld the original judgment and dismissed the appeal. The insurance company is ordered to pay Ms. Huang 500,000 yuan in claims, refund the premiums already received, and continue to perform the contract.

Public information from the Beijing Financial Court shows that in August 2022, Ms. Huang purchased a critical illness insurance policy from an insurance company, with an insured amount of 500,000 yuan, and was exempted from future premiums upon diagnosis of a critical illness. In January 2025, Ms. Huang was diagnosed with lung adenocarcinoma. Her claim for compensation was denied by the insurance company. Ms. Huang sued the insurance company in Beijing Chaoyang Court. The insurance company argued that Ms. Huang deliberately concealed her family history of tumors, including her mother’s breast and ovarian cancers and her grandmother’s lung cancer. Ms. Huang was aware of her significant genetic risk for tumors but did not disclose it at the time of application, which was considered intentional. The insurance company did not agree with all of Ms. Huang’s claims.

The first-instance court ordered the insurance company to pay Ms. Huang 500,000 yuan in insurance benefits, exempt her from future premiums, refund 6,454 yuan in premiums paid, and confirmed that the insurance contract remains valid. Dissatisfied, the insurance company appealed to the Beijing Financial Court. During the second-instance hearing, the court examined the validity of the insurance company’s questions regarding “family tumor history,” whether the sales personnel were insurance agents or brokers, whether the policyholder violated the duty of truthful disclosure, and whether the denial of claims and contract termination had factual and legal basis. The court guided both parties to present evidence and cross-examine, fully protecting their litigation rights.

“Statistics show that nearly 70% of personal insurance cases involve clarifying and determining the policyholder’s duty of truthful disclosure, and the outcome can have a transformative impact on insurers and insureds.” Regarding core issues such as “how to define the scope of the policyholder’s duty of truthful disclosure,” the presiding judge and deputy head of the Beijing Financial Court’s filing division, Hao Di, explained that insurance companies should ask questions within a reasonable scope, clearly and explicitly. When professional terminology is used, insurers should provide explanations. They should not abuse their questioning rights to arbitrarily expand the scope or use ambiguous language. If questions contain general clauses or are vague and ambiguous, the principle of interpreting doubts in favor of the insured should be applied to achieve substantive fairness in the case.

Hao Di stated that in this case, the insurance company’s electronic personal insurance application asked about hereditary diseases, not family tumor history. Objectively, based on current medical knowledge, tumor family history is difficult to classify as a hereditary disease. Moreover, Ms. Huang did not conceal her mother’s illness when applying. It is unreasonable to expect consumers to proactively disclose information beyond the scope of the questions. This does not constitute a breach of the principle of good faith by the insurer and is not conducive to protecting the rights of financial consumers or the sustainable development of the health insurance industry. Through circuit court trials and exemplary rulings, this case guides insurance companies to standardize their practices in underwriting, claims, and other processes, promoting the healthy and sustainable development of the insurance industry.