Can Plaintiff Get Back The Premium?

Today, the business law class was talk about the insurance law.

The insurance contract is a contract that whereby one person, called the insurer, agrees to indemnify another person, called the insured, against a loss which may arise upon the occurrence of the particular event.

Premium is the consideration paid by the insured either in the form of a lump sum or periodical amount.

Doctrine of utmost good faith is 1 of the important component that covered in the insurance law. Doctrine of utmost good faith represents that each party to a proposed contract is under a duty to disclose to the other all information which would influence his decision to enter into the contract , whether such information is requested or not. Failure to disclose material information gives the other party the right to avoid the contract.

One of the cases I learnt in the class is Goh Chooi Leng v. Public Life Co. Ltd (1964). This case happened when a life insurance contract was made with the defendant company. The plaintiff made a false statement in the insurance policy. In the previous occasion the plaintiff was treated for pulmonary tuberculosis. But he did not disclose this information in the policy. So, the insurance company denied paying the insurance money. Finally, the court judged that the contract is voidable for non-disclosure of material information.

I have a doubt for this case. Since the court judged the contract is voidable and the defendant does not need to compensate the plaintiff then how about the premium?

The plaintiff was paid the premium to get compensation for loss but now he cannot get any compensation from the defendant. I will think that the plaintiff should also get back the premium because it is unfair to plaintiff due to he paid the premium but he cannot get anything finally. Although plaintiff has the responsible to disclose the information but maybe he does not realize those information are important and he must reported to the defendant. I believe that there are not all people that realize what information are important or vice versa.

Prepared by,
Fong Yok Yan (1071120015)