Would life insurance pay beneficiary if medical issues were not disclosed?

It depends on the materiality of the undisclosed medical issues. If the undisclosed medical issues are considered material to the insurance company's assessment of the risk, the insurance company may be able to deny the beneficiary's claim. However, if the undisclosed medical issues are not considered material, the insurance company will likely have to pay the beneficiary the full death benefit.

Materiality is a legal concept that refers to the significance of a fact in relation to a particular transaction or contract. In the context of life insurance, a material fact is one that would have influenced the insurance company's decision to issue the policy or the amount of the premium charged.

For example, if an applicant for life insurance fails to disclose a history of heart disease, this could be considered a material fact because it could have increased the insurance company's assessment of the risk of death. As a result, the insurance company may be able to deny the beneficiary's claim if the applicant died from heart disease.

On the other hand, if an applicant for life insurance fails to disclose a history of allergies, this would not likely be considered a material fact because it would not have increased the insurance company's assessment of the risk of death. As a result, the insurance company would likely have to pay the beneficiary the full death benefit even if the applicant died from an allergic reaction.

In some cases, the insurance company may be able to rescind the policy if it can prove that the applicant made a material misrepresentation on the application. Rescission means that the insurance company cancels the policy and returns all premiums paid. However, rescission is only possible if the insurance company can prove that the applicant intentionally lied on the application.

If the insurance company did ask about medical history and the applicant lied about it, it could be considered fraud. In this case, the policy could be voided and the beneficiary could lose the entire death benefit.