What does Utmost Good Faith mean in life insurance terms?
Utmost Good Faith in life insurance terms means that both the customer and the insurance company understake to be completely honest with each other and not withhold or partialy withould information. Any breech of Utmost Good Faith could be used to invalidate the policy. Under such circumstances you could lose any right to cliam, have the policy cancelled and lose any previously paid premiums. You are required to be completely honest when applying for life insurance and disclose all relevant personal and medical information, including any previous health problems you have had. Unless you are completely truthful in your life insurance application, there will be a risk that your life insurance company will not pay out when a claim is made against the policy. Don’t risk it – tell them everything.
