Pre-Existing Condition (Vorerkrankung)
A pre-existing condition is a medical condition that already existed before conclusion of the insurance contract, whose disclosure under the duty of disclosure is relevant to underwriting and the insurer's acceptance decision.
Concept
A pre-existing condition is a medical condition of the person to be insured that already existed or had been diagnosed before the conclusion of the insurance contract. Within the medical underwriting that generally precedes contract conclusion in health and life insurance, the complete and truthful disclosure of known pre-existing conditions is of central importance for the insurer’s assessment of the risk to be insured.
Relevance for Underwriting
Based on the disclosed pre-existing conditions, the insurer decides during underwriting whether and on what terms a contract will be offered; possible outcomes include acceptance at standard rates, agreement of a risk loading, a time-limited or permanent exclusion of benefits for the condition concerned, or – in the case of particularly serious findings – complete rejection of the application.
Consequences of Incorrect Statements
If known pre-existing conditions are not disclosed, or disclosed incompletely, at the time of application in breach of the duty of disclosure, this can, depending on the severity of the breach and its causal link to the subsequent insured event, give the insurer a right of withdrawal, adjustment, or termination, and in individual cases a complete denial of benefits; case law generally focuses on the policyholder’s state of knowledge at the time of application.