What is concealment in the context of insurance?

Concealment in the context of insurance refers specifically to the act of withholding material facts that are crucial for the insurer's decision-making process regarding the issuance of a policy or the terms under which it is issued. This means that if an applicant fails to disclose information that could significantly affect the insurer's assessment of risk, this could be considered concealment.

Material facts are those that a reasonable insurer would consider important in evaluating the risk associated with insuring the applicant. For example, if an individual applying for life insurance fails to disclose a pre-existing medical condition, this could materially impact the insurer’s decision on whether to issue coverage and at what premium rate.

Understanding this concept is vital because if concealment is discovered, it may result in the denial of a claim or cancellation of the policy, as the insurer relied on incomplete or inaccurate information when underwriting the application.