Insurance Claim Denied for Undisclosed Tumor Family History, Court Rules: Policyholder Awarded 500,000

After three years of insurance coverage, being diagnosed with lung cancer, the insurance company refused to pay out claiming “failure to disclose family history of tumors”? This is the recent dilemma faced by Ms. Huang, born in the 90s, during her critical illness insurance claim process.

According to reports from 21st Century Business Herald, this health insurance contract dispute was recently publicly heard at the Beijing Financial Court’s Financial Street Circuit Court. The court ruled on the spot: since the insurance company did not make clear and effective inquiries about “family history of tumors,” the policyholder did not violate the obligation of truthful disclosure, and the first-instance judgment was upheld. The insurance company is required to pay Ms. Huang 500,000 yuan in claims, refund the 6,454 yuan in premiums already paid, and waive future premiums.

This case not only concerns the personal rights of consumers but also involves the core issue of the “obligation of truthful disclosure” in insurance law.

Judge Hao Di, the presiding judge and deputy chief of the Beijing Financial Court’s Filing Division, stated that statistics show nearly 70% of personal insurance disputes involve the determination of the obligation of truthful disclosure. As internet technology deeply integrates into the insurance industry, making underwriting, claims, and other processes more complex, the recognition of the obligation of truthful disclosure faces new challenges. The Beijing Financial Court aims to lead the insurance industry in standardizing practices in underwriting, claims, and other areas through circuit court trials and exemplary rulings, promoting sustained and healthy industry development.

Dispute Focus: Is family tumor history considered a “hereditary disease”?

Going back to August 2022, Ms. Huang, born in the 90s, purchased a critical illness insurance policy from a certain insurance company with a coverage amount of 500,000 yuan, which stipulated that premiums would be waived upon diagnosis of a critical illness. In January 2025, Ms. Huang was diagnosed with lung adenocarcinoma and immediately filed a claim with the insurance company.

However, the insurance company refused to pay, citing that Ms. Huang did not truthfully disclose her “family history of tumors” at the time of application. The insurer claimed that Ms. Huang’s mother had breast and ovarian cancers, and her grandmother had lung cancer. Knowing her significant genetic risk of tumors, she did not disclose this information when applying, which was considered intentional.

Ms. Huang argued that she had truthfully disclosed her relatives’ illnesses through the sales personnel at the time of application, and the insurance company did not explicitly inquire about “family history of tumors.” Both sides held different views, leading her to sue the insurance company.

The first-instance court held that since the insurance company did not make an effective inquiry about “family history of tumors,” Ms. Huang did not violate her obligation of truthful disclosure. The court ordered the insurance company to pay 500,000 yuan in insurance benefits, refund the 6,454 yuan in premiums, and waive future premiums, maintaining the validity of the insurance contract. Dissatisfied, the insurance company appealed to the Beijing Financial Court.

Second Instance Ruling: Vague Inquiry, No Active Disclosure Obligation for the Policyholder

In the second-instance hearing, the panel focused on two main issues: first, whether the insurance company’s inquiry about “genetic diseases” in the application form was equivalent to an effective inquiry about “family history of tumors”; second, whether the sales personnel Ms. Huang contacted were insurance agents or brokers, and whether their disclosures fulfilled the obligation of truthful disclosure.

The Beijing Financial Court found that, according to insurance law and relevant judicial interpretations, the scope of the policyholder’s obligation of truthful disclosure is limited to matters explicitly inquired about by the insurance company.

In this case, the insurance company asked in the “Personal Insurance Electronic Application” whether the insured currently suffers from or has ever suffered from genetic diseases, but did not directly ask about “family history of tumors.” Moreover, the definition of “genetic diseases” in the insurance contract did not include any mention of family tumor history. The court pointed out that, from both medical and general consumer perspectives, “family history of tumors” cannot be equated with “genetic diseases,” so the insurance company’s inquiry cannot be considered clear and effective.

Regarding the role of the sales personnel, the court clarified that Ms. Huang contacted an insurance broker, not an agent of the insurance company. However, according to the “Measures for the Management of Insurance Sales Behavior,” insurance brokers are also considered insurance sales personnel. If the insurance company authorized the sales personnel to inquire, then Ms. Huang’s act of truthfully informing the sales personnel about her relatives’ illnesses is legally attributable to the insurance company. Since the sales personnel did not further inquire or refuse the application, it cannot be deemed that Ms. Huang failed to fulfill her obligation of truthful disclosure.

Ultimately, the Beijing Financial Court ruled on the spot: dismiss the appeal and uphold the original judgment. This is the final ruling.

Legal Explanation by the Judge: Clear inquiry is a prerequisite; the policyholder’s obligation should not be overly broad

Judge Hao Di, the presiding judge and deputy chief of the Beijing Financial Court’s Filing Division, stated after the ruling that nearly 70% of personal insurance cases involve the recognition of the obligation of truthful disclosure, which significantly impacts insurers and insureds. As internet technology deepens integration into the insurance industry, making underwriting and claims more complex, the recognition of this obligation faces new challenges.

Hao Di emphasized that under China’s “inquiry and disclosure” model, insurance companies should make inquiries that are reasonable, clear, and explicit. When professional terminology is used, insurers should provide explanations. They should not abuse their inquiry rights to arbitrarily expand the scope or use ambiguous language. If the inquiry contains general or vague terms, the principle of interpreting ambiguous provisions in favor of the insured should be applied to achieve substantive fairness.

She pointed out that in this case, since the insurance company did not explicitly inquire about “family history of tumors,” and given current medical understanding, it is difficult to consider such history as a hereditary disease. Moreover, the consumer did not conceal her mother’s illness; demanding the consumer to proactively disclose beyond the explicit inquiry clauses is inconsistent with the principle of good faith and is not conducive to protecting financial consumers or healthy industry development. This case, through circuit court trials and exemplary rulings, aims to guide insurance companies to standardize their practices and promote the sustained and healthy development of the insurance industry.