What Happens If I Lie On My Life Insurance Application?
We’re all probably guilty of shedding a couple pounds from our weight when we fill out medical forms or not owning up to the occasional bottle of wine, but when it comes to lying on your life insurance application, the consequences can be heavy.
Honestly is truly the best policy when applying for life insurance. Most policies institute a two-year period where the insurance company can cancel your policy or decrease the benefit amount if there’s reason to believe you’ve been untruthful.
If you purposefully omit information related to your health or you lie to appear more “insurable,” most companies reserve the right to drop your policy.
Common Lies On Life Insurance Applications
Intentionally leaving out major health information – like having cancer, history of heart problems, or current medications – can lead to problems if ever your beneficiaries are in a position to file a claim for the policy.
Among the most common lies on life insurance applications are:
Family’s history of cancer (or other major health challenge)
Tobacco use
Depression
Driving record (history of dangerous driving)
Illegal drug use
Yearly salary (income dictates benefit amount for which you’re eligible)
While many life insurance policy options require a medical exam, the majority of those tests includes an evaluation of height, weight, blood pressure, and urine sample, and wouldn’t pick up on other health factors that could be fabricated on paper.
Insurance Companies Can Validate Your Info
Keep in mind that insurance companies have access to a number of records to validate…or disprove…what you claim on an application. Companies can utilize the Medical Information Bureau (MIB) database to double check the health information you provide. Insurers can also access your driving record to check for risky behavior – speedy tickets, crashes, or DUI violations.
What Happens If I Lie?
If you knowingly submit wrong information with the intent to defraud the insurance company, insurers can increase your premium or deny you altogether. If you obtain a policy and the insurer later discovered you lied, you could be dropped.
The most important takeaway regarding a mistruth on your application is that if it’s discovered you lied on your application and you die, the insurance company could lower the benefits offered to your family or deny the claim outright.
To avoid the risk of having your policy dropped by the insurance company or leaving your family with no financial security, be truthful on your life insurance application. If you have a health problem or mark on your driving record you’re concerned over, speak with an insurance agent about your options.
