Life Insurance Claim Rejected for Non-Disclosure of Symptoms: High Court Clarifies the Duty of Disclosure Under the Financial Services Act 2013
Life insurance is intended to provide financial security for loved ones upon the death of the insured. However, policyholders must appreciate that the duty to disclose relevant medical information begins even before the insurance policy is issued.
In the recent High Court decision of Ong Yi Xiang v Hong Leong Assurance Berhad [2026] CLJU 1944, the Court dismissed a claim for RM1 million under a life insurance policy after finding that the deceased had deliberately or recklessly provided an incorrect answer in the insurance proposal form regarding his medical symptoms. The decision serves as an important reminder that an applicant’s obligation is not limited to disclosing diagnosed illnesses but also extends to known symptoms that may be material to the insurer’s assessment of risk.
Background Facts
The deceased obtained a life insurance policy issued by Hong Leong Assurance Berhad with a sum assured of RM1 million.
The policy was purchased as protection for a financing facility granted by Hong Leong Bank for the purchase of a commercial property. Instead of taking a Mortgage Reducing Term Assurance (MRTA), the deceased chose to purchase a life insurance policy, naming his son as the nominee.
The policy commenced on 26 October 2020.
On 19 February 2022, the deceased passed away due to lymphoma. Following his death, the plaintiff submitted a claim under the policy. The insurer rejected the claim on the basis that the deceased had failed to disclose material health information during the application process.
The plaintiff subsequently commenced legal proceedings seeking payment of the RM1 million insurance benefit together with damages.
The Main Issue Before the High Court
The central issue was whether the insurer was entitled to repudiate the insurance policy because the deceased had answered “No” to the following question contained in the proposal form:
“In the past five years, have you experienced, or are currently experiencing, any symptoms or complaints for which you have not consulted a doctor?”
The insurer alleged that this answer was false because the deceased had already been suffering from enlarged neck nodes and other symptoms long before completing the proposal form.
The Medical Evidence
The insurer conducted investigations after the claim was lodged by obtaining medical information from hospitals that had treated the deceased.
During the trial, three treating specialists gave evidence regarding the deceased’s medical history.
The evidence showed that:
- the deceased informed one specialist that he had experienced enlarged neck nodes since January 2020;
- another specialist recorded that neck swelling first appeared in March 2020;
- the deceased had also reported abdominal discomfort several months before his diagnosis;
- these symptoms all existed before the proposal form was signed on 14 May 2020.
The Court accepted that the medical history recorded by the treating doctors originated from information supplied by the deceased himself and therefore constituted reliable evidence of his prior knowledge of the symptoms.
The Plaintiff’s Argument
The plaintiff argued that the deceased had never been diagnosed with lymphoma when he completed the proposal form.
Accordingly, it was submitted that there had been no deliberate concealment because the deceased did not know he was suffering from cancer.
The plaintiff further argued that the deceased had consulted doctors regarding certain symptoms and therefore there had been no material non-disclosure.
The High Court’s Decision
The High Court rejected the plaintiff’s arguments.
The Court observed that the proposal form did not ask whether the applicant had been diagnosed with cancer or any other illness.
Instead, the proposal form specifically asked whether the applicant had experienced symptoms or complaints.
The Court emphasised that the relevant inquiry was whether the deceased knew that he was already experiencing symptoms at the time he completed the proposal form.
Based on the evidence, the Court found that he did.
The deceased had informed his treating doctors that he had experienced enlarged neck nodes months before completing the proposal form. Despite this knowledge, he answered “No” to the relevant question.
The Court therefore held that the answer was deliberately or recklessly false.
The Duty of Utmost Good Faith
The judgment reaffirmed the long-established insurance law principle of uberrima fides, or utmost good faith.
An applicant for insurance is under a duty to make full and honest disclosure of material facts during the application process.
The Court referred to earlier authorities confirming that an insurer is entitled to rely upon the answers given by the insured in the proposal form and is generally under no obligation to independently investigate those answers before issuing the policy.
This principle exists because the applicant possesses knowledge of his own medical condition while the insurer must assess the risk based on the information provided.
Application of the Financial Services Act 2013
The Court also examined Schedule 9 of the Financial Services Act 2013, which governs the duty of disclosure for consumer insurance contracts.
The legislation distinguishes between life insurance policies that have been in force for two years or less and those that have remained in force for more than two years.
Since the deceased passed away less than two years after the commencement of the policy, the insurer only needed to establish that the misrepresentation was deliberate or reckless in order to avoid the policy.
After reviewing the evidence, the Court concluded that the statutory requirements under the Financial Services Act 2013 had been satisfied.
Why the Insurance Claim Failed
The insurer successfully established that:
- the deceased already knew he was experiencing enlarged neck nodes before completing the proposal form;
- the proposal form specifically required disclosure of symptoms and complaints;
- the deceased nevertheless answered the question negatively;
- the incorrect answer amounted to deliberate or reckless misrepresentation;
- the insurer was therefore entitled to repudiate the policy.
Accordingly, the High Court dismissed the plaintiff’s claim and awarded costs of RM30,000 to the insurer.
Key Legal Principles
This judgment provides several important legal principles for both insurers and policyholders.
First, an applicant is required to disclose known symptoms even if no formal diagnosis has been made.
Secondly, the wording of the proposal form is crucial. Where the insurer asks about symptoms or complaints, applicants cannot limit their answers to diagnosed illnesses.
Thirdly, where a life insurance policy has been in force for less than two years, the insurer may rely upon the provisions of the Financial Services Act 2013 to avoid the policy if deliberate or reckless misrepresentation is established.
Finally, insurers bear the burden of proving non-disclosure or misrepresentation, but once credible medical evidence establishes prior knowledge of symptoms, the Court may uphold the insurer’s decision to reject the claim.
Conclusion
The decision in Ong Yi Xiang v Hong Leong Assurance Berhad illustrates that the duty of disclosure in insurance law extends beyond confirmed medical diagnoses.
Applicants should answer proposal forms with complete honesty and disclose any material symptoms or complaints, even where the underlying illness has yet to be identified.
For insurers, the case confirms that a carefully conducted investigation supported by contemporaneous medical evidence may justify repudiation of a policy where deliberate or reckless misrepresentation is established.
For policyholders, the judgment is a reminder that inaccurate or incomplete answers given during the application process may have significant consequences for beneficiaries seeking to enforce the policy after death.
Need Legal Advice on an Insurance Dispute?
Insurance disputes often involve complex questions concerning policy interpretation, disclosure obligations, statutory rights and medical evidence. Every case depends on its own facts, and a rejected claim does not necessarily mean the insurer’s decision is legally correct.
At JY Ko Advocates & Solicitors, we advise and represent individuals and businesses in a wide range of civil and commercial disputes, including insurance litigation, contractual disputes and High Court proceedings.
Our services include:
- Advising on rejected life and medical insurance claims;
- Reviewing insurance policies and proposal forms or repudiation thereof;
- Acting in insurance litigation before the Malaysian courts;
- Advising insurers and policyholders on disclosure obligations under the Financial Services Act 2013;
- Representing clients in commercial and contractual disputes.
If you have received a rejected or repudiated insurance claim or require legal advice regarding an insurance dispute, our team is ready to assist you.
This article is intended for general informational purposes only and does not constitute legal advice. Legal advice should be obtained based on the specific facts of each individual case.
Written on: 17th July 2026, Friday
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Disclaimer: The above proposition is subject to actual facts and circumstances and shall never be referred as the actual law without seeking legal advice. Consult us for more information!