Zurich has won a claim dispute by arguing it would not have provided death cover to a man if he had disclosed mental health conditions, other medical issues and drug use.

In May 2022, the insured made an income protection claim, relating to depression, against the insurance in superannuation he had bought in 2018.

He died by suicide the next month and his spouse claimed on his $1 million death cover.  

In May 2024, the insurer denied both the income protection and death claims, citing fraudulent non-disclosure and misrepresentation of the man’s medical history. Superannuation trustee HTFS Nominees supported Zurich’s stand.

The Australian Financial Complaints Authority has backed the decision after the man’s spouse complained about the denial of death cover.

She said the man was not diagnosed with a mental health condition until after 2018, and she denied he failed to take prescribed medication. 

She said he was unaware of his family history because of estrangement, and any failure to disclose was innocent, not fraudulent. She sought a compromise payout of $500,000.

AFCA says it is satisfied the man failed to disclose and made misrepresentations about his health in his application, prepared with the help of a financial adviser.

He had consulted doctors about his mental health, eye issues and cannabis use in the months before his application, and his explanations for not disclosing them were not credible.

He disclosed an eye problem and mental illness to a previous insurer in 2012 and discussed his family’s mental health issues with a doctor in 2017.

AFCA is satisfied Zurich would not have covered the man if it had known of his mental health issues and drug use, and says answers in his application were made “with reckless indifference to the truth”.

Read the determination here.