TOPEKA (CN) – A life insurance company properly rescinded a couple’s policy because the husband failed to disclose some of the health problems that contributed to his death, the Kansas Courts of Appeal ruled.
Steve and Karen Chism purchased a policy from Protective Life Insurance Co., which would pay off their car loan if either of them died.
The Chisms did not read the policy, nor did they disclose that Steve suffered from high blood pressure, vascular disease and diabetes. He died of a heart attack 7 months after signing the policy.
Protective rescinded the policy, and Karen unsuccessfully sued for breach of contract. Judge McAnany agreed with the trial court that the policy should be denied.
“With respect to a life insurance policy,” McAnany wrote, “the insurer generally has the right to rescind the policy ab initio for fraud or misrepresentation.”