Disclosure

What Does Disclosure Mean?

Disclosure involves the full and complete revelation of information relevant to a specific matter. In the context of insurance, it pertains to the obligation of both parties to accurately disclose all pertinent information when entering into an insurance contract. In essence, it ensures that neither the insurer nor the insured withholds any critical details during the formation of the agreement.

Insuranceopedia Explains Disclosure

When an insurance contract is formed, failure to provide proper disclosure can lead to legal consequences. For instance, if an individual applying for life insurance conceals relevant medical information, such as a history of heart attacks, it exposes the insurer to greater risk than anticipated. If this misrepresentation is discovered, the policy may be terminated, potentially with or without a refund of premiums. Since insurance contracts are legally binding, both parties are obligated to act honestly and disclose all pertinent information.