What Happens If You Lie On A Life Insurance Application?

What Happens If You Lie On A Life Insurance Application

Whether you are looking for a life insurance policy or you have a current policy, you are likely to have questions about what happens if you lie on a life insurance application. It is not uncommon for people to lie on their life insurance application to avoid higher insurance rates or to get a better rate. This is called insurance fraud. It is a form of deceit that can have severe consequences.

The worst case scenario for someone who lies on a life insurance application is the denial of the claim. This defeats the purpose of purchasing insurance, and can be very devastating for a family. During the underwriting process, life insurers can look at your past medical records to make sure that you haven’t lied about something. If you have lied about a serious medical condition, you can expect to face penalties. Depending on the type of insurance you have, your insurance carrier may not pay the benefit in full, or may refuse to pay it at all.

Besides denial of the claim, life insurers can also raise your insurance rates if you have a pre-existing medical condition. They may also choose to cancel the policy. These are some of the most common scenarios, but it is important to remember that the legal consequences will vary depending on the type of insurance you have.

If you have been convicted of insurance fraud, you may face criminal charges. You will have to pay a fine and possibly lose your insurance. In addition, if you lie on a life insurance policy, you could be required to start a new application with a different insurance company. Getting a life insurance policy from a different carrier can be difficult. Often, a new insurance company will investigate you more.

The Medical Information Bureau (MIB) keeps a database of health records for life insurers. It also stores information about people who have lied on life insurance applications. When life insurers receive information that an applicant has lied, they can cross reference it with their MIB database. They may also review other documents to see if you’ve lied on the application. You may be required to supply a financial supplement that details your assets and liabilities. You may also be asked to complete a questionnaire.

While many applicants may lie on their life insurance applications, others may not even realize they are lying. If you have a tobacco problem, for example, you may be tempted to lie about your smoking history to get a cheaper policy. However, life insurers typically charge more for smokers than for non-smokers. It is also important to remember that if you use nicotine patches, you may not be aware that you are in the tobacco category.

When an insurer discovers that an applicant lied, they may refuse to offer coverage, or may only offer it in part. For example, an insurer may choose to cancel the policy if an applicant has a pre-existing medical condition, but not if the condition will not cause premature death.

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