S'porean man buys 12 insurance policies, falls to death, insurer rejects wife's S$1 million policy claim

A Singaporean man signed up for 12 insurance policies before falling to his death from the 33rd floor of a building in Victoria, Australia, during an apartment viewing.

Cheong's policies covered him for S$6.9 million, despite his yearly earnings totalling around S$75,000, reported The Straits Times.

According to court documents, his widow sued for payment of S$1 million under a life insurance policy.

In 2019, the High Court ruled that the insurer was entitled to void the policy, due to fraudulent non-disclosure and misrepresentation, and her claim was dismissed.

The couple were former insurance agents

The couple who had a son were former insurance agents till 2009, stated court documents.

Cheong had signed 12 insurance policies, with the final six signed in Singapore with prominent insurers within four months from March to June 2014.

About two years after Cheong paid for his policies, he died on Sep. 26, 2016.

The Coroners Court of Victoria, Australia, stated that his death was accidental and a result of "multiple injuries sustained in a fall from height".

Tan sued in 2021, but the High Court ruled that to void the policy, as Cheong replied "no" to questions on whether he was applying for other policies or had policies pending for approval, stated ST.

In court documents, Crawford & Company, a claims management company and loss adjuster, evaluated Cheong's insurance policies and noted that there were 12 policies totalling S$6,854,750 purchased.

However, the Grant of Probate, which legally recognises the executor of the deceased's estate, only listed seven policies totalling S$2,764,000.

Hence, the court cited this alongside Cheong's three prior life insurance applications as the reason for the dismissal.

Buying life insurance policies

Even if one has the means to purchase high premiums, there is a cap on the insured amount for life insurance, which is based on up to 30 times the customer's annual income, according to ST.

This multiplier concerns individuals aged 20 to 40, with a lower limit for those older.

In underwriting assessments, insurers must take into account existing policies and pending applications.

Hence, when the deceased signed his policy and responded with "no" to questions regarding whether he had pending policies or similar applications, the policy was undermined by the wrong answer.

According to ST, based on Cheong's age and disclosed annual income, his total coverage maximum would have been S$2.25 million, a third of the S$6.9 million he had taken.

The high court stated that if Cheong made full disclosure of his existing and pending life policy applications, his application for AIA's five-year term life policy for S$1 million would have been rejected.

The widow, a former insurance agent, would have known that, and the court also noted her conduct in only listing seven policies rather than the full 12.

Related article

Top photo from Canva