In what situation might an insurer refuse to pay out a claim related to disability income policy?

An insurer might refuse to pay out a claim related to a disability income policy if the insured fails to disclose relevant health history. This is because insurance policies rely heavily on the concept of insurable interest and full disclosure during the application process. When applying for insurance, the applicant is required to provide accurate and complete information regarding their health background.

If an individual withholds information or provides misleading details about their medical history, this can be considered a material misrepresentation. Such a misrepresentation may lead the insurer to conclude that the risk associated with insuring that individual is different than what they initially assessed based on the disclosed information. Therefore, if a claim is made and it is later discovered that significant health issues were not disclosed, the insurer has the right to deny the claim based on the grounds of the insured's failure to provide complete and truthful information.

In contrast, having a good record of employment does not inherently affect the legitimacy of a claim since the ability to work does not negate the existence of a disability covered under the policy. Similarly, a claim amount below a certain threshold would not typically cause a denial, as policies often define minimum payout criteria but do not base the decision to pay out claims on such thresholds outright. Lastly, age in itself does not