MS is not hereditary, nevertheless, blood relatives do have a significantly higher risk than the general population, which is why some insurance companies won’t cover it if a first degree relative has been diagnosed.
I don’t think you will get the insurance company to change it, just because your consultant confirms it’s not hereditary. They’d still be accepting a higher than average risk.
You might be able to find another insurance Co. that is not so fussy, but I don’t think you’ll get the present company to budge, if that is their policy, based on assessment of risk.
I had critical illness insurance for some years, through work, and oddly enough, I can’t recall ever being questioned about the health of other members of the family, or even my own medical history, prior to taking out the insurance. I guess some insurers want more background than others.
However, one difficulty is that once your daughter KNOWS of circumstances that have led to her being turned down by another insurer, she is technically under a duty to disclose them, whether asked about it or not. If she chooses not to, but later tries to claim for that thing (multiple sclerosis or similar) it may invalidate the claim if it comes to light that she knew, but did not disclose that you already had it.
So rather than keep quiet and pay for insurance that may fail if she tries to make a claim on it, it’s probably better to be honest, and try to find a company that will provide cover regardless. The odds are still very much against it, but IF she were unlucky enough to develop MS in future, the last thing she’d need is to find the premiums she’d been paying for years were worthless, because she hadn’t mentioned it was in the family.