I get this question a lot, and I always thought it absurd, but I guess there's an impression out there in the Rugby world.
A health insurance company can ask about sky-diving, and martial arts, and off-road vehicles, and PROFESSIONAL sports.
I'm confident you're NEVER getting paid to play Rugby... ;)
So, that leaves us with the health insurance application. It's not the insurance companies business regarding your personal activities, unless you work with SeeChange Health, in SoCal, which gives you discounts for healthy activities. (I'm appointed with them, and I'm seeing other companies go in the same direction.)
So, you can't get denied for playing Rugby.