A woman whose husband committed suicide a year after he took out mortgage protection and life cash policies has settled a legal action against the insurer Irish Life.
It refused to pay out on the basis that the married dad of two, who died three years ago, had failed to disclose a single incident of excess alcohol consumption in 2008, which had resulted in a hospital admission.
The man was seen by a psychiatrist as part of normal hospital procedures before he was discharged, but hospital notes confirmed he was not suicidal or psychotic.
It is understood that the man, who was reported missing days before his body was found, was in "significant debt" at the time of his death.
The widow, the beneficiary of the policies, sued Irish Life for almost €900,000 after the company declined cover amid claims the man should have disclosed he was treated for excess alcohol consumption.
The case was struck out last week shortly before it was due to be heard in the High Court.
The terms of the settlement were not handed into court and remain confidential.
Before accepting the man's proposal, Irish Life had sought a medical report from the man's GP who said he had never been treated for alcohol or any mental illness including depression.
The GP described the man's alcohol consumption as "moderate". The man also underwent a medical examination by the insurer before the policy came into effect.
In court papers, Irish Life said hospital records described the dead man as being engaged in "binge drinking" and that he had "alcohol problems" and claimed that this issue – a material fact – should have been disclosed.
But an insurance expert who said the case was "by no means clear-cut" said he believed Irish Life was not entitled to decline indemnity.
Last night life assurance expert John Geraghty, Chief Executive of LABrokers, said life assurance was based on the level of risk insurers knew they were taking on and rely, in large part, on the response of policyholders to detailed questions on the proposal forms.
"There are a few old wives' tales about suicide and insurance," said Mr Geraghty. "At one point insurers would not pay, but previous incidences of issues such as mental health can, if disclosed, be built into the premium".
Irish Life said it did not comment on individual cases.
But in a statement it said it was a policyholder's duty to fully inform the insurer of every material fact, including medical information.
"Failure to disclose a material fact can result in a claim being refused.
"Where there is doubt about whether a fact is material, it should be disclosed," said a spokesperson for the insurer.