This paper is to study and analyze some important cases held by the recent Korean Supreme Court. The issue which will be dealt with in this paper involves the duty of disclosure. Where a consumer insurers another person`s life, is it duty of consumer that investigate the person whose life is insured about their health? The Supreme Court construed the related matters, and this paper clarified the holding. The section 651 of Korean Commercial Code is based on utmost good faith, and it has been interpreted to mean that a insured is under a duty volunteer material information, and that the penalty for failing to do so is avoidance. It places an obligation on the insured to disclose every circumstance which would influence the judgement of a prudent insurer in fixing the premium or determining whether he will take the risk. This paper tries to clarify the meaning of intention and gross negligence. It is now generally accepted good practice that insurers should ask insureds questions about any material facts they wish to know. Where a consumer takes out insurance on another person`s life, the insurer should ask the person whose life is being insured. In this case the insurer may not rely on the information provided by the consumer. The consumer would not owe a duty to investigate the state of another person`s health. The result is that where a consumer takes out insurance on another person`s life, both the consumer and the life insured are under a duty to take reasonable care not to make a misrepresentation.