Life Association of Scotland v Foster, 1873 SLR 10_215
Citation: Life Association of Scotland v Foster, 1873 SLR 10_215
Rule of thumb: If you are fat with heart problems, take out a life insurance policy, and then die of a heart attack, is the life insurance policy still valid? Yes, it is not automatically void, although the insurer may be able to argue that the premiums should have been higher to reduce the payout, but the whole policy is not necessarily void.
Judgment:
The basic facts of this case were that a woman took out life insurance and then died of a heart attack – it was subsequently discovered that she had heart disease and did not declare this. The Court were faced with the question of whether this was a sufficiently serious error to render the contract void. The Court held that this did not render the contract void and indeed only altered what the premiums would have been – it was also held that this was not done fraudulently to make the contract voidable either, ‘One of your Lordships put the question during the argument, whether the pursuers maintained the same law in regard to a congenital disease of the heart, unknown and unsuspected during life, and only ascertained on post mortem examination. If I do not mistake, the answer was, that such congenital disease would be within this warranty. If the pursuers'argument is well founded, nolife-policy could have been validly effected at any time by such a person, though he may have lived for many years, and on his death the policy would be declared void, and all the premiums forfeited. It is often said that heart disease is more common now than formerly, and if the pursuers' proposition is sound in law, it is right that the proposition and the law should be known. I do not mean to say that I have felt this question free from difficulty. The argument for the pursuers has been no less able than urgent; and there have occasionally been judicial remarks made in England on the enforcement of warranty, which, if applied to this case, might create difficulty. But, on the prior question, whether there is in this contract an absolute warranty against this disease, known or unknown, I think there is no authority opposed to the case of Hutchison. According to my conviction, there is no such warranty here. Justice and equity and good faith forbid it, and it is relief to my mind to feel satisfied, as I do, that no authority in point of law has been adduced clear enough and strong enough to compel me to decide against the good faith of the policy, and in favour of the Insurance Company. I think that on both grounds of action the defenders are entitled to absolvitor’, Lord Ardmillan at 229
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