Updated: June 29, 2022
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What you should know:
- Lying about a life insurance application is never a good idea because it can lead to lower benefits or even rejection of the insurance policy
- Misstatements are reported and tracked, so any future life insurance application may be affected as well
- If you die and your insurance company determines that there was wrong information in your claim, your claim may be denied, leaving your beneficiaries without death compensation.
Life insurance rates are calculated based on your age, medical history, and lifestyle, so having a pre-existing medical condition or reaching an older age will significantly increase your premium. If you’re having this problem, you might be wondering what would happen if you misrepresented the truth in your life insurance application. This article will explore the consequences of lying on a life insurance application and how insurance companies verify the information you give them.
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Lying on a life insurance application
What happens if you lie on a life insurance application? Deleting information or slightly manipulating the truth to get a better rate of security may seem harmless. The most common questions people lie on file Life insurance application Age, weight, tobacco and substance use, as well as their medical or mental health history.
Pre-existing health conditions such as cancer, diabetes or high blood pressure will result in a higher insurance rate compared to a healthy person. Age is another factor, as younger applicants will have cheaper policies than older applicants. Some lifestyle choices can also affect the rate of insurance, such as your occupation, playing dangerous sports, traveling to war zones, etc.
However, lying about your life insurance application can have serious consequences and is never a good solution to avoid a higher rate. Alternatively, you can shop to find the most expensive life insurance policy that will still give you the coverage you need.
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How is my life insurance application verified?
After submitting a life insurance application, the insurance company begins the verification process. The agent will first evaluate the results from the health questionnaire you filled out and your medical records. They may even conduct personal interviews with your friends and relatives.
Your insurance company may ask you to have a medical exam where your height and weight will be recorded, blood pressure measured, and blood and urine tested for basic health parameters. The insurance company will also run a check through a database maintained by the Consumer Reporting Agency, Medical Information Bureau (MIB)And the To find out any relevant health information. They can also check your driving records for violations. For further clarification, consider our guide on the importance of medical records and the role of MIBs in life insurance.
If there are discrepancies between the information you provided and the insurance agency’s findings, you may be rejected on the life insurance policy. In addition, most life insurance policies have a two-year competition period during which the insurance company can reduce your benefits or cancel your policy if it determines that you omitted information or lied about relevant data.
Consequences of Lying to Your Life Insurance Application
Lying on a life insurance application can be treated as insurance fraud, with serious consequences. The outcome will depend on the significance of the hidden information and can range from lower payments to policy cancellations and the inability to insure in the future.
If your insurance company determines that you lied about a life insurance application, it will report the incident to MIB so that it appears in any future insurance applications. This means that you will likely pay a higher insurance rate in the future or may have difficulty finding an insurance company that agrees to offer you an insurance policy. If the misrepresented information is relatively harmless, your insurance company may just ask you to review this section of the app.
If you die during the two-year competing period and your insurance company discovers false statements in your application, your claim will likely be denied. As a result, beneficiaries will not Receive your death benefit. There are several reasons why a life insurance company will not pay a claim. If the lawsuit is filed after the competition period is over and the insurance company can prove the alleged fraud, it can sue the beneficiaries for damages.
Honest mistakes happen with life insurance claims
Mistakes happen to everyone and life insurance applications are no exception. If you really forgot relevant information or made an unintentional mistake in citing information from your past, you shouldn’t be in trouble. In most cases, your insurance company will allow you to correct the information in question without further consequences. Having your medical records on hand when applying will help avoid such errors. If you notice this at a later time, notify your insurance company so that the information can be changed.
If your circumstances change after you purchase life insurance, it will not affect your policy. The policy takes into account your information and lifestyle choices at the time of application and is not affected by any subsequent changes that may occur in your life.
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Bottom line about lying on life insurance application
Omission of information or outright lying on a life insurance policy is never a good idea. You may lower your price temporarily, but the consequences of your dishonesty may cost you much more. Be honest about your circumstances when applying for life insurance and save on your insurance rate by shopping for the best deal available. Start your search for affordable life insurance today and browse through many companies by entering your zip code on our site FREE Quote Tool less.