After Being Diagnosed with Cancer Two and a Half Years Post-Policy and Denied Coverage, Final Appeal Victory! Court: Insurance Company's Policy Inquiry Matters Should Be Reasonably Scoped and Clearly Explicit

Financial Daily Reporter | Zhang Shoulin Financial Daily Editor | Zhang Yiming

From a legal perspective, what does truthful disclosure when purchasing insurance actually mean? The answer to this question directly affects whether a claim can ultimately be approved after coverage is purchased.

A recent insurance dispute case involving Ms. Huang, a “post-90s” individual, serves as a textbook reference for those planning to buy insurance.

It is reported that Ms. Huang was diagnosed with a malignant tumor nearly two and a half years after purchasing insurance. After the first-instance court ruled in her favor, the insurance company appealed, placing her as the respondent in the second instance.

Recently, the second instance trial was held in Beijing. The “Daily Economic News” reporter attended the entire court session on-site. Following the case, the Beijing Financial Court issued a final judgment: the insurance company is to pay Ms. Huang 500,000 yuan in claims, refund the premiums already paid, and continue to perform the contract.

Image source: Beijing Financial Court

Purchased insurance over two years before diagnosis

In August 2022, Ms. Huang purchased critical illness insurance from an insurance company, with an insured amount of 500,000 yuan, and a waiver of subsequent premiums upon diagnosis of a critical illness. In January 2025, Ms. Huang was diagnosed with lung adenocarcinoma at a hospital, and subsequently applied for a claim but was denied.

Ms. Huang filed a lawsuit. The insurance company argued that: at the time of application, the applicant deliberately concealed family tumor hereditary history, including her mother’s breast cancer, ovarian cancer, and her grandmother’s lung cancer. The applicant was aware of her significant familial tumor risk but did not disclose it truthfully, with subjective intent. The insurance company did not agree to all of the applicant’s claims.

In response, the first-instance court ruled that: the insurance company should pay Ms. Huang 500,000 yuan in insurance benefits; waive her future premiums; refund 6,454 yuan in premiums paid; and the insurance contract remains valid.

Unsatisfied with the first-instance ruling, the insurance company appealed to the Beijing Financial Court.

Recently, the case was heard in Beijing for the second time. The Beijing Financial Court announced its verdict: the obligation of truthful disclosure during the application process means that, at the time of contract formation, the applicant has a duty to truthfully inform the insurer of important facts about the insured or the insurance object, so that the insurer can accurately assess whether to underwrite and at what rate. According to Article 16, Paragraph 1 of the Insurance Law of the People’s Republic of China and Article 6, Paragraph 1 of the Supreme People’s Court’s Interpretation (II) on the Application of the Insurance Law, the scope of the applicant’s duty of truthful disclosure is limited to matters explicitly inquired about by the insurance company.

The judgment pointed out that the insurance company’s question in the “Personal Insurance Electronic Application Form” was whether “the insured currently suffers from or has previously suffered from hereditary diseases,” not whether there is a family history of tumors. Furthermore, the definition of hereditary diseases in the contract did not include any mention of family tumor history. From both a medical and a consumer perspective, “family tumor history” cannot be regarded as a “hereditary disease,” and thus the insurance company’s inquiry in the electronic application form did not explicitly and effectively ask about “family tumor history.”

The court found that Ms. Huang had truthfully disclosed her relatives’ tumor conditions to the sales personnel, who did not further inquire in detail nor refuse to continue with the application. Therefore, based on the evidence, Ms. Huang did not violate her duty of truthful disclosure.

During the insurance period, Ms. Huang was diagnosed with a critical illness as stipulated in the contract, and she did not breach her disclosure obligations. The insurance company did not issue any notice of contract termination. The case also falls under the two-year non-pleading period, meaning the contract remains in force. After her diagnosis, Ms. Huang is entitled to the waiver of subsequent premiums as per the contract. Therefore, the first-instance court’s ruling that the insurance company pay 500,000 yuan and refund the premiums paid is supported by contract and law. The Beijing Financial Court announced its verdict: the appeal is dismissed, and the original judgment is upheld. This is a final and binding judgment.

Chief Judge: The scope of inquiries in insurance applications should be reasonable, clear, and explicit

Recently, regarding this case, the “Daily Economic News” reporter interviewed the presiding judge of the case, Deputy Chief of the Beijing Financial Court’s Filing Division, Hao Di. She pointed out that, according to statistics, nearly 70% of personal insurance cases involve clarifying and determining the applicant’s duty of truthful disclosure, and the outcome of such determinations can have a transformative impact on insurers and insureds. The deep integration and advancement of internet technology in the insurance industry profoundly impact and change traditional processes such as underwriting, claims, and policy issuance, making the performance and assessment of the duty of truthful disclosure more complex.

Image source: Beijing Financial Court

She further explained that under China’s “inquiry and disclosure” model, insurance companies should set reasonable, clear, and explicit inquiry scopes. When professional terminology is used, insurers should provide explanations and not abuse their inquiry rights to arbitrarily expand the scope or use ambiguous language. If the inquiry involves general clauses or vague, ambiguous content, the principle of interpretive ambiguity in favor of the insured should be applied to achieve substantive fairness.

Regarding this case specifically, Hao Di stated that the insurance company’s inquiry in the electronic application form was about hereditary diseases, not family tumor history. Based on current medical understanding, it is also difficult to classify family tumor history as a hereditary disease. Ms. Huang did not conceal her mother’s illness at the time of application. Demanding consumers to proactively disclose information beyond the scope of the inquiry clauses is unreasonable. This does not align with the principle of good faith and is not conducive to protecting consumers’ rights or the sustainable development of the health insurance industry. This case, through a circuit court trial, demonstrates and guides insurance companies to standardize their practices in underwriting, claims, and other processes, supporting the healthy and sustainable development of the insurance industry.

Cover image source: Beijing Financial Court