UAE: Can insurers deny life cover payout if illness was undisclosed?

Question: I am the heir to my mother, who had made a life insurance policy. I requested the payment of the policy amount from the insurance company as her heir, but the company refused to pay on the grounds that my mother died of cancer, although she had not disclosed this condition when signing the life insurance policy. My question: Does the insurance company have the right to refuse payment based on this? Please advise.

Answer: As a general rule, Article 1046 of the Civil Transition Law bounds the insurer, in the case of life insurance, to pay, to the insured or to the beneficiary, the sums agreed upon the occurrence of the event insured against or on the maturity date stipulated in the contract, without the need to establish the damages sustained by the insured or the beneficiary.

But the insured, according to Article 1032 of the same law, is bound to reveal, at the time of conclusion of the contract, all information which the insurer consider of importance to be known by him, to assess the risks covered by him. He is also bound to inform the insurer of all matters occurring during the contract period, which can lead to the aggravation of risks.

Moreover, pursuant to Article 1033 of the same law, If the insured, in bad faith, conceals a matter or makes a false statement in such a manner as to lessen the importance of the risk insured against, or leads to a change in its object, or if he fraudulently breaches his promise to fulfill an obligation, the insurer is entitled to demand rescission of the contract and be paid all premiums due prior to such demand.

Based on the above, in case the insurance policy contains a term related to the medical situation of the insured and the latter did not disclose it, the insurance company has the right not to pay and the beneficiary must prove that the insurance company is mistaken, to get paid.