I forgot to mention a medical condition when I took out life insurance

It can, if the non-disclosure was material. Insurance contracts are based on the duty of utmost good faith, and applicants must disclose facts that a prudent insurer would want to know when deciding whether to insure and on what terms. If the insurer can show that the undisclosed information was material and that it would not have issued the policy or would have done so on different terms, it may be entitled to avoid the policy or reduce the payout. However, insurers must show that the non-disclosure actually mattered, and questions on application forms that were ambiguous can weigh in the policyholder's favour. The family can ask for the insurer's reasons and the underwriting file in writing, and if the decision remains unreasonable, complain through the internal process and then to the Insurance and Financial Services Ombudsman.