Can I Get Away with Lying on My Life Insurance Application?
This is a question that has been asked by many a person dreading the cost of their premiums while filling out their life insurance application. It seems easy enough just to tell, what seems to be, a little white lie that will trim the fat on your premiums, but it can, in fact, create a nightmare for you down the road.
First of all, these insurance companies have been around the block a time, or two, and have seen just about every lie, scheme, and con in the books. They’ve documented them, trained their staff to be aware of them, and the chances that you’re going to throw one by them are slim to none.
Lies That Make the Rounds… and How They Catch Em’
- Tobacco Usage
- The Lie: Checking the “non-smoker” box on the application. This is by far the most common lie told as it can up your rate by a couple hundred dollars. Also, it can be a lie told unintentionally, as most don’t realize that their nicotine patch, or that occasional cigar, still counts. The Catch: Sometimes, an individual will get caught immediately when they undergo their health exam for the policy, but not always. However, when a person dies of cause related to tobacco usage, it’s a dead giveaway. Chief Underwriter for alternative and strategic distributions at ING, Lynn Patterson states, “It doesn’t pay to lie on your application if the company would have insured you, but at a higher rate…if you lie, the company can deny the claim.” The Consequence: Usually, the insurance company will go one of two ways: they’ll either reduce the death benefit to the amount of premiums paid, minus the difference they weren’t paying being a smoker, or they will rescind the policy entirely, if the policy is still within its contestability period.
- The Lie: Misrepresentation of the number of moving violations acquired. Usually, it’s not that an individual won’t own up to having had a moving violation, but they will lie about how many. Patterson states, “They may not admit to number three or four.” The Catch: All moving violations, and/or DUIs, will come to light as soon as the insurance company pulls your MVR (motor vehicle record) from the DMV. The Consequence: Denial issued for your application; increased difficulty acquiring insurance elsewhere. If this company was providing the best rates, your little white lie just shot you in the foot.
- The Lie: Is there any history of cancer within your family? “No” box
checked. An insurance application asks not just about your medical history, but that
of your family’s. Lies are told commonly here, as an applicant doesn’t want to pay
more for afflictions they haven’t had themselves. The Catch: Often, this lie is
caught right away as your doctor will be consulted and if they have any record of
your family medical history (when you first went to that doctor, they asked you
about it) any cancer-related issues will be in there. Less often, you get away with
it for now, but if you do happen to die from a cancer-related cause later and a
family history of cancer turns up in the investigation, you’re caught anyway. The
Consequence: If you’re caught early, your application is denied. If you’re caught
after death, your death benefits will either be drastically reduced, or the policy
will be rescinded entirely.
It’s always best to be as truthful as possible when dealing with any type of company, life insurance providers are no different. Ensure you are as transparent as possible to get the best rates and service available. Talk to Suncorp today to find out more about how they can help you & your family.
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Family Cancer History
The nightmare is really for the beneficiary! You know, the person who is to benefit form the proceeds of the policy.
Nice post, thanks for all the great information.