When you apply for a life insurance policy, your insurer decides your premium based on several factors including your age, medical history and lifestyle. Typically, older people and those with pre-existing medical conditions including smokers pay more compared to younger, healthier individuals.
Because of this, it may be tempting to provide false information to get a lower premium. Lying may not necessarily mean providing false information, but may also include unknowingly or knowingly omitting key information. Doing this may have serious implications and even affect your credibility in the future.
Let’s take a look at some of the consequences of lying on a life insurance application.
What constitutes lying on a life insurance application?
Many people are not aware that failing to reveal if a family member, even a deceased one, had a disease such as cancer constitutes lying in life policy application. Some insurance companies may not be specific in their application forms but that does not exempt you from providing the required information.
Here are ways that might be considered as falsifying information on your application form.
- Failing to state your drug use history, even if you are no longer using. A lot of insurance companies in the UK including Caspian Insurance will ask for details of any medication that you are currently taking or took in the past 5 years.
- Not stating if you have an existing policy
- Lying about your age to get a lesser premium
- Lying about your medical history
- Giving incorrect weight and height on an online application
- Not stating if you are a smoker or use alcohol
Other several factors constitute lying depending on the insurance provider’s requirements. The main reason people lie is to enjoy lower premiums.
Here is what may happen if it’s found out you lied on your application.
Consequences of lying on your life insurance application
Depending on the severity, and stage of detection, lying may be considered insurance fraud and may result in your case being listed with the Medical Insurance Board. This may mean other insurers refuse to insure you in the future.
If you lie on your application form, the receiving insurance company can also decide not to offer their services to you anymore. This is common when the omitted information is regarded as serious. Such a case would include failing to state if you have an existing medical condition.
If the insurer regards the omitted information as not important, they may decide to approve the application but levy a higher premium instead.
In certain cases, insurance providers may fail to detect the lie at the application stage. In the UK, insurance providers have a two-year contestability period from the time your life insurance policy goes into play, where they can dispute the death benefits if they suspect misinformation.
In such a scenario, if the policyholder dies within that period and it is discovered they gave wrong information on their application, the insurer might pay a lesser amount or decline to pay altogether.
What if I unintentionally gave incorrect information?
It is not uncommon to fail to provide or provide incorrect information on your life insurance application. Sometimes information such as weight, history of medication, or family’s medical history may not be available on the go.
In such cases, your insurance provider may overlook this. However, it is advisable to have all the required information at hand during the application to provide accurate data.
NEVER lie on your life insurance application. If you are worried about getting a higher premium or being denied life insurance cover, you are better off talking to an independent life insurance agent about your options.
Some insurance companies, not all, may not be open to insuring individuals with existing medical conditions such as cancer. While omitting this information may seem like an easier option, it is not the best. You’d be surprised to know there are insurance companies that will cover you despite your condition.
Alternatively, you can improve your eligibility with insurance by maximising on the other areas of concern. For instance, you can avoid behaviors that are regarded as risk factors such as smoking, drinking, and engaging in life-threatening activities.
Take your time when shopping for insurance and let insurance companies you are shopping for a cover. After all, this is a business like any other, and despite the risks, there is always someone with an offer out there.
Have you ever lied or provided inaccurate information while applying for life insurance? How did it end? Please share your feedback and experiences in the comments below.