Believe it, or not, you may not be as smart as you think you are when it comes to lying on your life insurance application. More than likely, your lie has been told before, and has been caught red-handed before, time and time again. Just think about it; how long have insurance companies been around? They’ve seen it all!
However, most of the time, the lies we’ve outlined below are what they see over and over. So, if you’re considering filling in the blank with one of these, you might want to thoroughly consider the ramifications it might inflict upon your loved ones once you’re gone.
So, what happens if you life on your life insurance application? Lynn Patterson, Chief Underwriter for alternative and strategic distribution at ING, 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.” You can learn about this and the Suncorp life protect policy on their website.
Nope! There’s No History of Cancer in My Family… No Way!
- Why it’s a Common Lie: It’s simple, and honestly, somewhat understandable. Someone perfectly healthy doesn’t want get stuck with a higher premium just because someone in their family tree was unfortunately afflicted with cancer.
- How You’ll Get Caught: A background check into your family’s medical history is part of the application process and more than likely you’ve noted a family history of cancer with your doctor at some point. Due to this, you’re likely to get caught sooner, rather than later.
- What the Consequence Will Be: Application denial, if caught early. If caught upon the time of claim, within the policy’s contestation period, the policy can be completely rescinded with no payout given.
I’ve Never Used Tobacco a Day in My Life… Honest!
- Why it’s a Common Lie: According to the National Association of Insurance and Financial Advisors, statistics show that this is by far the most common lie told on both life and health insurance applications. As the saying goes, ‘it’s an expensive habit’ and most want to get out of the much higher premiums, or don’t realize that their nicotine patch counts!
- How You’ll Get Caught: Health examinations are also part of the life insurance quote process, so usually this is where the catch happens. However, if you do manage to get around it, but pass away due to a tobacco-related cause within the contestation period, you’ll still get caught.
- What the Consequence Will Be: It depends on your insurer’s policies. Some will only press the matter if the policy is still within the contestation period, but it’s a risk. Typically, a policy will be rescinded, or the death benefits will be watered down to cover the premium amount that wasn’t paid.
Oh, I’ve Only Had One Moving Violation… Maybe Two
- Why it’s a Common Lie: The more you’ve racked up on your MVR (motor vehicle record), the higher the premium. Lies of omission are common, as most will just leave off one, two, or… you know, five incidents.
- How You’ll Get Caught: That annoying MVR has your complete driving history all packed up and ready to be sent off to your potential insurer. All they have to do is read.
- What the Consequence Will Be: Basically, the only consequence here is that you’ll receive a denial from the insurer for coverage, as you won’t get any further than that. However, it can be a significant consequence if this particular insurance company was already offering the best rates; likely the case, as you wouldn’t have chosen them otherwise.
Have you heard of anyone being denied from lying on their life insurance application?