Why would someone lie on their application for life insurance?
Your life insurance company uses the information you submit through your application and medical questionnaire to calculate their risk that you will die within the policy term and they will have to pay your beneficiaries. Those at greater risk pay higher premiums than those who do not.
As a matter of public policy, life insurance companies can cancel life insurance coverage if the policyholder misrepresented themselves in their application and medical questionnaire in order to get a lower premium payment. This article explains what happens, how to avoid this problem, and how life insurance beneficiaries might still get their payout.
If the life insurance company denied your claim for life insurance death benefits due to the policyholder’s alleged misrepresentation, call the life insurance lawyers at Boonswang Law. We have helped life insurance beneficiaries across the nation get their payout when the policyholder allegedly misrepresented themselves.
WHAT TO DO WHEN AN APPLICANT FAILS TO COMPLETE THE LIFE INSURANCE APPLICATION PROPERLY
What happens when someone makes mistakes or lies on their life insurance application?
Wrong or false information on your application for life insurance or medical questionnaire can invalidate your life insurance policy because the life insurance company can void the contract due to fraud.
This can happen even if you did not intend to lie on your life insurance application. Even when an error or omission on a life insurance application is unintentional, any instance of misrepresentation can make it difficult for your beneficiary to recover the death benefits you want them to receive.
When applying for life insurance, be as thorough and accurate as possible on your application. Accuracy will help ensure that your beneficiary will recover the benefits for which you are paying.
If your application was prepared by your life insurance agent, be sure to review it carefully before signing. If your application contains misrepresentation of material facts due to your agent’s negligence, that can also result in your beneficiaries’ claims being denied. Also, life insurance agent lies may arguably void the policy, depending on a given state’s laws..
In any case, be sure to review your life insurance application and medical questionnaire carefully before signing it and submitting it to the insurance company.
WHAT HAPPENS IF YOU LIE ON YOUR LIFE INSURANCE POLICY APPLICATION?
Your beneficiaries will likely have trouble getting their claims paid. Any misrepresentation on a life insurance application, whether intentional or unintentional, by you or by your agent puts the life insurance benefit at risk.
YOU MAKE AN HONEST MISTAKE ON YOUR LIFE INSURANCE APPLICATION
In many states, the life insurance company must show that the policyholder intentionally misrepresented themselves. For example, by failing to disclose medical conditions they knew they had, failing to disclose medications they take, or failing to disclose dangerous sports or hobbies. Even underreporting your weight or age can void your policy.
If your life insurance attorney can show that the policyholder made an innocent mistake, the life insurance company must pay your claim for death benefits. In some cases, we get claims paid minus the amount the policyholder would have paid in premiums had the mistake or omission not occurred.
LIFE INSURANCE FRAUD DURING THE APPLICATION PROCESS
If an applicant for life insurance coverage intentionally lies on their application or medical questionnaire, the life insurance company will void the policy and deny beneficiaries’ claims for death benefits.
CLAIMS ON DEATH BENEFITS FOR LIFE INSURANCE WITH FALSE INFORMATION
If you are a life insurance beneficiary, you can submit a claim for benefits but in some instances, it may be better if you have a life insurance lawyer submit the claim on your behalf. This is so because your submission will be coming from a position of strength (i.e., a law firm backing you) as opposed to weakness (i.e., going it alone). You typically won’t know that your loved one’s application contained a misstatement or omission before the life insurance company denies your claim due to misrepresentation.
If you have already submitted a claim and got your life insurance claim denied, you may still be able to recover with the help of an experienced life insurance lawyer at the Boonswang Law Firm.
MISSTATEMENT OF AGE PROVISION IN LIFE INSURANCE
Beneficiaries will find it difficult to recover death benefits when the policyholder’s application states an incorrect age. Many life insurance policies contain a “misstatement of age provision” which states that the life insurance company will only pay the amount that would have been purchased for the premium if the correct age had been provided.
In other words, a beneficiary’s claim will pay out the amount of money that it would have paid out if your loved one’s age was accurate. This payout will certainly be less than expected.
Even if the misstatement was accidental, a life insurance company is likely to reduce benefits to match the true age of the insured. Insurers also reduce benefits if someone other than the insured (such as the agent) is to blame for the misstatement.
Case Study #1: Having interviewed the insured and the insured having answered all questions honestly, the insurance agent prepared an application and the insured signed it without reviewing it. It set forth her age as 10 years younger than she said it was. Our client’s claim for death benefits was denied, but because the agent prepared the application, the agent’s knowledge was imputed to the company and there was no fraudulent intent on the part of the insured. We got our client’s claim paid.
INCORRECT INCOME LISTED ON LIFE INSURANCE APPLICATION
When applying for life insurance, applicants may be tempted to stretch the truth in their favor. Lying on a life insurance application is always extremely risky because in most states, a life insurance company can deny a claim for death benefits even if the misrepresentation and the cause of death are completely unrelated, depending on the law of a given state.
Overstating your income, or even merely estimating your income, will increase the risk that your beneficiary’s claim is denied — even if the insured never missed a premium payment. If your claim is underpaid or denied because of inaccurate income, you will likely require an experienced life insurance lawyer to help you get your payout.
INACCURATE WEIGHT ON LIFE INSURANCE APPLICATION
Life insurance companies rely on your weight to decide your rate class and premiums. Because weight is an important factor in deciding coverage and premiums for all life insurance companies, an inaccurate weight listing will increase the chance that your beneficiary’s claim will be delayed or denied.
Lying about weight on a life insurance application is fruitless because Insurance companies always find out if your weight is inaccurate. They receive an accurate report from your life insurance medical exam, and may even look at your health history to verify the weight you stated on your application.
Life insurance height and weight charts are available online to understand what category into which an individual is likely to fall based on their BMI. Overweight or obese individuals are still eligible for life insurance and are likely to find coverage that meets their needs without sacrificing accuracy on an application and risking that their contract be voided due to misrepresentation.
Case study #2: Our client’s claim was denied for alleged incorrectly-answered questions on the insured life insurance application. An insurer can only rescind a policy if it can show that an untrue statement or omission of material fact was made with the intent to deceive, and that the misrepresentation regarded the cause of death. This insurer could show neither, so we were able to get our client paid.
INCORRECT MEDICAL HISTORY OR FAMILY MEDICAL HISTORY
Failing to disclose conditions or diseases your family members had or have can constitute misrepresentation and cause the life insurance company to rescind coverage. More often, an application will fail to disclose their own medical condition or disease. Here are some actual case studies where this occurred, and what we were able to do for our clients. Keep in mind that while these are real-life cases, we cannot guarantee the same or similar results in any other case.
Case study #3: The insured disclosed her heart complications and recent hospitalization to her insurance agent, who in turn neglected to disclose that on her life insurance application. Her beneficiary’s claim was denied. Because the agent’s knowledge is imputed to the life insurance company, we got the beneficiary’s claim paid.
Case study #4: The agent filled out the life insurance application for the insured, who was blind and had diabetes. The agent failed to disclose these conditions on the application, however, and the insured signed it. Because the insured could not see the application, no fraudulent intent could be proven. We got our client’s claim paid.
LYING ABOUT DRUG USE OR TOBACCO & ALCOHOL USE
An applicant for life insurance must disclose lifestyle habits, good and bad, including use of alcohol or use of tobacco. A life insurance applicant must also disclose illicit drug use.
Case study #5: The insured told his insurance agent that while he used to smoke, he quit a few months ago. The agent marked the question about smoking “no” and did not record that the insured had COPD and Hepatitis C. The life insurance company denied our client’s claim. Again, the agent’s knowledge was imputed to the insurance company and we got our client beneficiary’s claim paid.
MISSING INFORMATION ON LIFE INSURANCE APPLICATION
When an applicant for an individual health policy fails to complete the application properly, insurance companies are more likely to increase premiums, reduce benefit payments, or deny benefits outright. The same happens if a life insurance agent fills an application out incorrectly.
Case Study #6: The insured disclosed that she was taking Nexium 40mg for acid reflux. Her beneficiary’s email was denied because of alleged material misrepresentation in that the insured failed to disclose that she was diagnosed with dyspepsia, gastroesophageal reflux disease with esophagitis, and related afflictions. This happened in Georgia. Under Georgia law, because the insured disclosed the Nexium 40mg, the insurance company was on “constructive notice” that the insured was more seriously ill and should have inquired further when the application was received. We got our client paid.
MISTAKE ON LIFE INSURANCE APPLICATION WHEN THE INSURED DIES WITHIN THE CONTESTABILITY PERIOD
If the insured dies within the first two years of coverage and the life insurance company discovers a mistake or omission on the insured’ initial application, it is very likely they will rescind the policy and deny any claim for death benefits.
The first two years of life insurance coverage is called the Contestability Period. If the insured dies within two (2) years of policy approval, a life insurance company can rescind coverage if there are any errors or omissions on the application, even if those errors or omissions have nothing to do with the insured’s cause of death.
Know that even when the contestability period has passed, a life insurance company will rescind coverage if they can show that the insured misrepresented an aspect of his or her health that may have affected approval. For example, if the insured dies of a heart attack within the contestability period, the insurer may deny benefits if the insured failed to report their history of high cholesterol on the application.
A LIFE INSURANCE AGENT MAKES A MISTAKE ON THE APPLICATION
If the life insurance agent intentionally or negligently misstates information about the insured on their initial application, the life insurance company will deny a beneficiary’s claim for death benefits due to alleged misrepresentation.
In these cases, our experienced life insurance lawyers investigate and find out whether the mistake was the applicant’s or the agent’s, and if the applicant’s, whether they intentionally lied to get a lower premium payment. In most agent mistake cases, we get our clients paid.
Case study #7: The insured disclosed high blood pressure and hypertension to the insurance agent but the agent did not record hypertension on the application. Again, the agent’s knowledge was imputed to the company. Failure to disclose a material fact on an application is grounds for voiding the insurance contract only if fraudulent. Because the company could not show that the insured’s intent was fraudulent, we got the claim denial overturned and our client was paid.
TALK WITH A LIFE INSURANCE LAWYER ABOUT MISREPRESENTATION
If you believe that you or a loved one may have inaccurate information on an application for life insurance, you should contact the insurance company immediately to submit an amended application. You don’t want your beneficiary’s claim denied due to a life insurance application mistake when you’ve paid the life insurance premiums all those months or years!
If you are a beneficiary and the life insurance company denied your claim due to alleged misrepresentation or fraud on the insured’s application for life insurance coverage, contact Boonswang Law to discuss the steps that we can take together to ensure you get paid. We only take cases on a contingency basis, meaning that we do not get paid unless and until you do. Call today to talk with an experienced life insurance lawyer, free of charge.
COMMON QUESTIONS ABOUT FALSE INFORMATION ON LIFE INSURANCE APPLICATION
CAN YOU GO TO JAIL FOR LYING ON A LIFE INSURANCE APPLICATION?
Lies on life insurance applications are usually discovered once the policyholder dies, so, no. However, fraud is a crime and can be criminally prosecuted. If you believe your life insurance application has mistakes, contact your life insurance agent or company to rectify them to ensure that your beneficiaries get the death benefit for which you’ve been paying.
WHAT ARE SOME THINGS PEOPLE LIE ABOUT ON LIFE INSURANCE APPLICATIONS?
Common lies on life insurance applications include age, weight, health history, current health, tobacco use, alcohol use, engagement in risky activities, sports, or hobbies, travel, and income.
WHAT IF A MISTAKE ISN’T CAUGHT UNTIL AFTER A POLICYHOLDER’S DEATH?
Mistakes usually do not come to light until a policyholder dies. Especially during the contestability period, a life insurance company will review the policyholder’s application and medical questionnaire, and if they find any inaccuracies or omissions, they will rescind the policy due to alleged misrepresentation.
If your life insurance claim was denied due to misrepresentation, call us. Don’t take no for an answer! We do everything we can to give you the best chances at getting paid.