Your mother may have told you one time or another that a white lie never hurt anybody, as long as your intentions are good. Unfortunately, lying on your life insurance application to save a few dollars every year can cause you more harm than good.
The Dangers of Lying on Your Life Insurance Application
In the eyes of insurance providers everywhere, fibbing on your life insurance application isn’t only unethical; it’s an act of fraud that is punishable under state law. If caught, the penalties you potentially face are largely dependent upon the degree of the lies that you have told; disciplinary actions include paying a fine, being placed on a probationary period and even serving prison time.
Most detrimental, however, are the consequences you face if your lies remain hidden until after you pass away. For instance, if you lose your life to a disease that you formally claim to not have, a portion of your life insurance claim may not be paid out to those who are expecting to receive it, leaving them without any restitution for your absence, thus eliminating the entire purpose of life insurance. This would also mean that the premiums you’ve paid over the years would have been for naught.
How will anyone know if I lied on my life insurance application?
For those who may have told a fib on their applications, it may be worrisome to learn that one of the many tasks entrusted to the Medical Information Bureau (MIB) is to detect such cases of fraud.
How, you may ask?
Some cases are fairly simple to solve. If the MIB finds that you have passed away from an illness that you claim to not have had, an investigation will be opened up in your name. During such an investigation, the MIB will search your medical history to see how long you have been formally diagnosed with the life-ending condition in question. If they find that your life insurance application was submitted after you were diagnosed, your payout amount may be withheld.
Most Frequent Life Insurance Application Lies
Now that we’ve defined the importance of being truthful on your life insurance application, here are five of the most popular fibs that can get applicants in trouble:
- Smokers who claim to not smoke.
- Withholding information regarding dangerous hobbies.
- Falsely denying to suffer from a life-threatening disease, such as diabetes, heart disease or cancer.
- Masking the use of legally prescribed or illegally ingested drugs.
- Failing to disclose mental health conditions, such as anxiety and/or depression.
Reversing Life Insurance Fraud
Okay, so you’ve made it this far into our article, and you suspect that there may be a lie or two that you’ve told on your original life insurance application. What do you do now?
To begin, you will need to have a fresh life insurance quote drawn up by Low Cost Life Insurance; this is your opportunity to ensure that all of the information you provide is accurate and up-to-date. After this has been complete, we will find the best insurance provider and policy for you, based on the data you offered. Once we have found the proper fit, you will swap your old life insurance policy out for your new one. At the same time, you will need to cancel your previous life insurance policy to ensure that you aren’t paying additional premiums.
Finally, remember that Low Cost Life Insurance is here to help you. It is possible to correct any mistakes you have made on your current life insurance policy. Reach out to Low Cost Life Insurance with any questions or concerns you may have; we’re ready to help you.