A woman with lung cancer has lost her bid for a life insurance payout after she failed to disclose medical tests she had.

Her insurer AIA would not have issued the policy if she had answered correctly on her application, the Australian Financial Complaints Authority says in a dispute ruling.

When the woman applied for cover in June last year, she said she’d had no medical tests or procedures in the past 12 months.  

However, medical records showed that a month earlier she saw her doctor concerning laryngitis and was referred for an ultrasound, which was conducted on June 3. The woman then had a telehealth consultation with her doctor on June 4 – the day she applied for life insurance.

She said she thought her laryngitis was cured and she applied for cover because she had a new job. She thought the ultrasound was a routine examination, not a medical test or procedure.

The ombudsman accepts she applied for cover before she spoke to her doctor on June 4, when the doctor arranged further investigations following the ultrasound.

However, AFCA is not persuaded she answered the application questions correctly, saying the ultrasound was arranged to investigate lymph nodes in her neck and unresolved laryngitis, and it was not a routine examination.

“I acknowledge the complainant has a very serious medical condition and is in a difficult situation. However, the insurer has shown the complainant breached her duty to take reasonable care not to make a misrepresentation when applying for the policy,” an ombudsman said.

It is fair for AIA to avoid the policy and deny the claim, AFCA finds. 

Read the determination here.