Duration of the duty to disclose
The duty to disclose continues until the life insurance contract is bound which is on payment of the first premium.
In Looker v law Union and Rock Insurance Co 1928. Locker completed and submitted a proposal form for life insurance which was accepted by the Life office stating that the policy would be issued on payment of the first premium on condition that his heath remained unaltered. Before the premium was paid the proposer fell ill. A friend paid the premium and Locker subsequently died of the illness. It was held that his estate could not benefit from the insurance because there was a continuing duty to disclose material changes to insurers up until completion of the contract.
The above case was further supported by Marshall v Scottish Employers’ Liability & General Insurance Company 1901. Held it was not sufficient that material details are correct when the proposal is completed, they must also be correct up to the point the contract is completed and bound.
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Consequences of Breach of Duty