The deliberate withholding of material facts in life assurance violates which legal principle?

The principle that governs the relationship between insurers and insureds is known as utmost good faith, or "uberrima fides." This legal doctrine mandates that both parties must deal honestly and disclose all material facts relevant to the insurance contract. When it comes to life assurance, the insured is required to provide comprehensive and truthful information about their health, lifestyle, and any other factors that could influence the insurer's decision to provide coverage.

Deliberately withholding material facts compromises this principle because it can lead to an imbalance in the understanding of risk between the insurer and the insured. If an insurance company is not made aware of certain material facts, it might issue a policy based on incomplete information, which fundamentally alters the contract's integrity. If a claim is later made and it turns out that critical information was concealed, the insurer could potentially deny the claim based on the breach of utmost good faith.

In contrast, insurable interest refers to the necessity that an individual must have a stake in the life being insured; capacity to contract pertains to the legal ability of parties to enter into a contract; and consideration reflects the value exchanged in the contract. While these concepts are important within the realm of insurance, it is the principle of utmost good faith that specifically addresses the obligation to