A Gen Z policyholder was denied cancer insurance claim, court ruled: insurer failed to make effective inquiry, policyholder bears no responsibility

Ms. Huang, born after 1990, purchased critical illness insurance and was diagnosed with malignant tumors. The insurance company refused to pay claiming she did not disclose her family history of tumors. Ms. Huang sued, winning the first instance. The insurance company appealed to the Beijing Financial Court, which ruled that because the insurer did not ask clear and effective questions, Ms. Huang had no obligation to disclose, and the contract remains valid. The appeal was ultimately dismissed, upholding the original judgment.

Recently, the Beijing Financial Court held a public hearing at the Financial Street Circuit Court for a second-instance health insurance contract dispute case and announced its verdict.

The case shows that in August 2022, Ms. Huang purchased a 500,000 yuan critical illness insurance policy from a certain insurance company, with a clause that diagnosed critical illnesses could exempt future premiums. In January 2025, Ms. Huang was diagnosed with lung adenocarcinoma. When applying for claims, her request was denied, and she subsequently sued the insurance company at Beijing Chaoyang Court.

In the first instance, the insurance company argued that Ms. Huang deliberately concealed her mother’s breast and ovarian cancers, and her grandmother’s lung cancer, which are hereditary tumor risks. Knowing she had a high genetic risk for tumors but not disclosing it, she acted intentionally and thus the insurer refused to pay.

The court ruled that the insurance company should pay Ms. Huang 500,000 yuan in insurance benefits, exempt her from future premiums, and refund 6,454 yuan in premiums. The contract remains valid. Dissatisfied, the insurance company appealed to the Beijing Financial Court.

During the second trial, the panel focused on whether the insurer’s inquiry about “family tumor history” was clear and effective, whether the sales personnel were agents or brokers, whether the policyholder violated the duty of truthful disclosure, and whether the insurer’s refusal to pay and contract termination were lawful. Both parties presented evidence and cross-examined.

The court held that the duty of truthful disclosure by the policyholder is limited to matters explicitly asked by the insurer. In this case, the insurer only asked whether the insured had hereditary diseases and did not specifically inquire about family tumor history. The contract’s definition of “hereditary diseases” did not include tumor family history. Based on medical knowledge and consumer understanding, these are not equivalent, so the insurer’s inquiry was not effective regarding family tumor history.

Additionally, Ms. Huang was insured through an insurance broker who had truthfully disclosed her relatives’ cancer history. The broker did not further inquire or refuse coverage, so Ms. Huang’s lack of disclosure cannot be deemed intentional. Moreover, the insurance contract involved is over two years old, and the non-claim clause applies. The insurer did not formally notify the contract termination and does not have the right to terminate the contract.

Based on these findings, the Beijing Financial Court confirmed that the first-instance judgment was factually clear and legally correct, and issued a final ruling: dismissing the appeal and upholding the original decision.

“Statistics show that nearly 70% of personal insurance disputes involve the determination of the policyholder’s duty of truthful disclosure, and the rulings significantly impact the rights of both parties,” said Hao Di, deputy chief of the Beijing Financial Court’s filing division and the presiding judge of this case. He noted that the deep integration of internet technology into the insurance industry has transformed traditional underwriting, claims, and policy issuance processes, making the fulfillment and judicial recognition of disclosure obligations more complex.

Hao Di pointed out that China’s insurance industry follows the “questioning and disclosure” principle. Insurance companies’ inquiries should be reasonable in scope, clearly expressed, and include sufficient explanations for professional terms. They should not arbitrarily expand the scope or use vague or ambiguous language. If the inquiry is broad or unclear, the principle of interpretive benefit should be applied, favoring the insured to ensure substantive fairness.

Regarding this case, Hao Di explained that the insurer’s electronic application form only asked whether the insured had hereditary diseases, not about family tumor history. From a medical perspective, tumor family history is not equivalent to hereditary disease. Furthermore, Ms. Huang did not conceal her relatives’ illnesses; demanding that the policyholder proactively disclose information not explicitly asked for is inconsistent with the principle of good faith, does not protect consumers’ rights, and is not conducive to the healthy development of the health insurance industry.