Essay About Ethics Case Discussion And Life Insurance Policy

Analysis Of Ethics In Insurance
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Ethics case discussion – Full disclosure for insurance
Synopsis of the case – Full Disclosure for Insurance
You have a family and want to take out a life insurance policy for yourself so that your family will be financially stable in the
unfortunate event that you pass away. However, you have a heart defect that, if disclosed to the insurance agent, will prevent
you from obtaining the insurance policy. Furthermore, the disclosure of the heart defect may prevent you from ever attaining a
policy, because the information will be reported to a central agency that all insurance groups use. If you do not disclose the
heart problem and obtain a policy, the policy can be canceled within the first couple of years if the problem is found. If nothing
is found within the first two years and you pay the premiums, the policy can never be canceled as long as you keep it open
and pay the premiums.
Issue: Should you disclose the information?
I will analyze the case against each of the three laws of Ethics. Here since there is a constraint on the space, I will restrict
myself to exploring only few of the many scenarios that are possible1.
Be consistent with my goals
Let me assume that my goal is to avoid hardships to my family in the event of my death. Let me also assume that the only way
to expedite the hardships is through taking an insurance policy.
Scenario 1 – I do not disclose the facts. I do not get caught in the next two years. I die! My family gets the benefits.
Subcase 1 a – My family getting benefits will not deprive other families from getting their rightful share of the funds. This
means that the insurance company has unlimited funds. i.e. even in the unlikely case of all parties taking insurance policies
claim their insurance money due to whatever circumstances, the company is in a position to pay them all out.
Under all these assumptions, it may seem that the case passes the utilitarian test. Let us examine this case more in detail
when discussing the second law.
Subcase 1 b – My family getting the benefits deprives other families from getting their rightful share of funds.
That is under the case where because I die and the company has limited funds and is unable to meet the demands of all
parties, then it is clearly violating the utilitarian law. That is all are not benefitting equally. The distributive justice is not
applicable in this case. Therefore, it would be clearly unethical to do this.
Scenario 21 – I take the policy. The insurance company is also a stakeholder. Insurance company also has people working for
it, the people also have families. Assume that a share of the money not given out as policies each year is paid out as a
salary/commission to employees.
In this case, my act immediately fails the utilitarian test as the insurance company paying my family will have an adverse
impact on the insurance people and their families. Hence it is clearly unethical on my part to pursue the insurance option.
Also considering the Kantians veil of ignorance, I would not want to be at the receiving end of someone elses deception.
Have a consistent rationale