Life insurance lawyers need to be know this 1990, opinion from the Texas Supreme Court. It is styled, Koral Industries v. Security-Connecticut Life Insurance Co.
It is not uncommon for a beneficiary of a life insurance policy to concede that misrepresentations regarding health were made on an application for life insurance. What they will contest is that the insurance company should have known of the misrepresentations.
In the Koral case, Koral sought insurance on one of its key employees, Lewis Lindsey. Lindsey did not disclose on the insurance application his medical history regarding treatment over the previous five years a history which included hospitalization in 1981, 1982, and 1983, and counseling and treatment for depression and excessive use of alcohol. Further, he had been treated for mental or nervous disorders from 1976-78, and his physician had treated him for anxiety.