Glickman v. New York Life Ins. Co., 32 N.Y.2d 55 (1973)

An applicant for insurance has a duty to disclose all material information about their health, and failure to do so constitutes a misrepresentation that can void the policy if the insurer was deprived of its freedom of choice in accepting the risk.

Summary

Dr. Glickman applied for a group accident and health insurance policy, failing to disclose a prior diagnosis and treatment for paroxysmal atrial fibrillation. After becoming disabled, his claim for benefits under Plan A ($1,000/month) was rejected, with the insurer only willing to pay under Plan C ($500/month). The court held that Glickman’s failure to disclose his heart condition was a material misrepresentation as a matter of law, entitling the insurer to deny the higher coverage because it deprived them of assessing and accepting or rejecting the risk based on accurate information. The court emphasized an insurer’s right to select its risks based on full disclosure from the applicant.

Facts

1. In January 1963, Dr. Glickman applied for group accident and health insurance, stating he was in good health.
2. He listed several instances of prior medical treatment but omitted a January 1962 diagnosis of paroxysmal atrial fibrillation, for which he was taking quinidine.
3. The policy offered three plans with varying monthly indemnity amounts, with the insurer reserving the right to limit coverage to the lowest amount if insurability evidence was unsatisfactory.
4. In 1964, Glickman became disabled and filed a claim, which was partially rejected due to the misrepresentation.

Procedural History

The trial court initially ruled in favor of Glickman. The appellate division reversed the trial court’s decision, vacated the judgment, and dismissed the complaint, finding that the misrepresentation was material as a matter of law. The New York Court of Appeals affirmed the appellate division’s decision.

Issue(s)

1. Whether Dr. Glickman misrepresented his health as a matter of law by failing to disclose his heart condition.
2. Whether the misrepresentation was material as a matter of law, justifying the denial of full coverage.

Holding

1. Yes, because Dr. Glickman failed to disclose his heart condition and related medical treatment, which constituted a misrepresentation.
2. Yes, because the misrepresentation was material, depriving the insurance company of the opportunity to properly assess and accept or reject the risk under the chosen plan.

Court’s Reasoning

The Court reasoned that Glickman, as a physician, should have been aware of the significance of his heart condition. The court emphasized the insurer’s right to select its risks, stating that failure to disclose is as much a misrepresentation as a false affirmative statement, citing Geer v. Union Mut. Life Ins. Co., 273 N.Y. 261. The court found that the heart condition was not a trivial matter and could have affected the insurance company’s decision regarding the application. The court stated, “By his failure to disclose his heart condition, plaintiff deprived the defendant of freedom of choice in determining whether to accept or reject the risk. On the record, there is little doubt that the defendant would have rejected the risk or certainly would have rejected it under Plan A.” This aligns with Insurance Law § 149 and the precedent set in Wageman v. Metropolitan Life Ins. Co., 24 A D 2d 67, affd. 18 Y 2d 777.