Premiums for life insurance are primarily determined by your age, health, and lifestyle. This means that people over 65 and those with pre-existing conditions will pay more to insure than people younger and healthier. When creating an insurance policy quote, life insurance underwriters take into account individual characteristics and circumstances.
Although it might seem tempting to lie about your age and health to save a lot of money, don’t do so. You will likely be caught if you lie on your life insurance application. If you lie on your application for life insurance, there are many things that could happen. This article will explain how insurance companies catch lies on your applications and what you can do if they find out.
Falsely completing a life insurance application
It can be tempting to lie on your application for life insurance in order to get a lower rate. There are many consequences for lying on your application.
It is quite common to lie on a life insurance application, especially for those who are older or have medical problems. These are some of the most common things people lie about when applying for life insurance.
- Age: Some people may claim to be younger than they actually are.
- Weight: Obese people may lie about their weight.
- Family medical history: A person might claim they don’t have a history of cancer in their family, but their grandmother died from lymphoma.
- Personal medical history: A person might lie about their family history of disease or past health issues.
- Tobacco use: A person who smokes occasionally may be able to check the “nonsmoker” box.
- Drug use: A person who has ever used any drug could lie about it.
- Mental health: A person with depression or another mental illness may lie about their mental state.
People lie about more than just their health. People lie about their income, profession, prescriptions, and many other things.
People lie about their life insurance applications to avoid having to pay a higher premium. A person with pre-existing conditions such as diabetes, cancer or high blood pressure will be charged a higher premium than someone who is otherwise healthy. A 70-year old will typically pay less for life insurance than an 80 year-old. This is why people lie about their age.
Although you may think lying on your application for life insurance is not a big deal, it can come back to bite you. Insurance companies are well aware that applicants lie to obtain a lower rate. They have their underwriters carefully examine each applicant’s background to ensure they are truthful.
What insurance companies look for when you lie
The verification process begins after you submit your application for life insurance. The underwriter will review your medical records, assess your underwriting medical exam results and pull your driving record from the state’s motor vehicle department. Life insurance companies know that applicants lie and they are vigilant in identifying discrepancies and conflicting information that could indicate fraud.
When verifying life insurance applicants, life insurance companies also use information from Medical Information Bureau (MIB). The MIB is a database that includes a profile of every person who has ever submitted an insurance application. Your MIB profile may indicate that you have previously lied about insurance applications. The life insurance company can then decline coverage due to your past untruthful actions.
If you lie on your insurance application or get caught, you will not be approved for life insurance coverage. Your insurance company can reevaluate your application if you lie on your insurance application or die within the first two year of coverage. It could have serious consequences for your beneficiaries if they discover that you were lying.
Lies on your application for life insurance can have serious consequences
Fraud is when you lie on your application for life insurance. It can lead to serious consequences. The consequences can vary depending on what lies were told and how severe they were.
The insurance company may immediately deny coverage if you lie during the application process. This will be logged in the MIB and other life insurance companies will also learn about it. It will be more difficult to obtain a policy for life insurance from another carrier.
Even if the lie is not major, you may be approved for coverage. However, you will have to pay a higher rate or get a lower coverage amount.
If you die within the first two year of your policy, and the insurance company finds out the truth after your death they have the right to cancel your coverage. Your beneficiaries could receive no death benefit or a lower death benefit than you paid for. The insurer would calculate how much coverage you would have bought if you had been truthful.
What happens if I make a mistake in my application?
Many questions are required for life insurance applications. You will need to review your medical history from the past several decades in order to complete the process. You might forget some important information, or make educated guesses. It is unlikely that this will affect your application.
Insurer fraud is when someone lies to or reports false information for their benefit. The life insurance company will not penalize anyone if you try to guess your weight or forget about a medication that you took 10 years ago. To make the process simpler, you can get a copy your medical records from the past before you fill out the application.
Questions frequently asked
What lies do people tell about their life insurance applications?
Life insurance applications are filled with lies. Most applicants lie about their income, prescriptions, age, and family history.
Are you allowed to go to prison for lying about your life insurance application
You won’t be arrested or sent to jail if you lie about your life insurance application. The MIB will record the incident, so other insurance companies will be able to see that you lied when you apply for life insurance. It could be very difficult to obtain coverage from another insurer if you lie once on your application for life insurance.
Are there any life insurance policies available for people with pre-existing medical conditions?
If you have a medical condition, you can still be approved for life insurance coverage. A guaranteed issue policy for life insurance approves nearly all applicants, regardless of their medical history. Simplified issue life insurance is also available. This policy does not require a physical exam but a written questionnaire.
Table of Contents