About 12.5 million Americans have lied when applying for insurance last year.
The lies are more rampant in the auto industry, where 30% of respondents admitted to stretching the facts.
Another 25% had no qualms blurring the truth when getting health insurance.
Humans are notorious liars, and most people lie about some things. People love to say honesty is the best policy.
However, Americans will let that policy slide to get a better life insurance policy.
Most Common Lies About Health On Life Insurance Application
Here are the six most common lies about health on life insurance applications.
#1. I Don’t Do Drugs
Drug use affects your health and thus your life in the long run. That’s why you find most people want to lie about it when applying for life insurance.
A history of drug use might increase the policy rates, hence why people lie about it.
#2. I Don’t Smoke
Hand in hand with drug use is the lie about smoking or tobacco use. Most insurance companies will have a box to tick if you use it. But most people lie that they ever smoked or used any tobacco.
However, lab tests can discover this if you lie. You also need to note that tobacco use isn’t only from smoking. Nicotine patches or Nicorette gum are still forms of tobacco.
Based on medical researchers, smoking even a single cigarette per month is already a reason for the application to be disapproved.
A single nicotine test can catch the lie. Hence, you shouldn’t lie about tobacco use.
#3. My Mental Health Is Perfect
This is one of the most common lies. Many people lie that they’ve never been depressed. Depression increases the chances of someone committing suicide or harming themselves.
Most people would want to lie about it on life insurance applications.
Don’t lie, you can find life insurance for depressed people.
#4. I Only Weigh That Much After Eating!
Obesity has become a scrouge recently. It can lead to several lifestyle diseases that could end your life sooner rather than later. Insurance companies will want to know if you’re obese or not.
So, what do applicants do? They lie about their weight.
When you decide to apply for life insurance, try to lose some weight and do not lie about it. There is life insurance for obese people, so, don’t worry much.
#5. History Of A Major Disease In Family
Another major red flag for insurance companies. People know that a history of major disease in the family might give them a hit on their rates.
So, they lie about it and say no one gets sick in their family!
#6. I’m Not Suffering From Any Major Disease
Someone could be prediabetic or suffering from cancer. And since they know the insurance company will want to know this, they lie about it.
Besides, many applicants are likely lying about their medical conditions to avoid higher premiums.
Some of these conditions are:
- AIDs or HIV
- Deadly cancer
- COPD
- Diabetes,
- Heart disease
- Hepatitis
- Kidney disease
- Problems with liver
- High-level cholesterol
- Hydrocarbon lipids & excess triglycerides
- Sickle cell anemia, and
- Stroke
Note that if your high blood pressure is supervised by your doctor, your rates will not be high.
In fact, some insurance companies are more considerate of specific medical issues. Your lies will eventually be uncovered.
What Other Lies Do People Tell On Life Insurance Application?
People don’t only focus on health when lying on life insurance applications. They also lie about the below things.
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Income
Your income affects the rates you may get the life insurance policy. Thus, it is common for life insurance applicants to lie about their money.
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Age
By comparison, older people get way steeper rates. Some people opt to knock down their age a few years to get a better deal.
Why lying? There is no need to lie actually. You can get whole life insurance for seniors.
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Occupation
This is another thing that people will most likely lie about. They could be earning way more, but they lie about their job since they don’t want a high rate.
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A DUI
You need to disclose if you’ve had a DUI in the recent past. One DUI on your record wouldn’t harm your chances if it happened ages ago. But two and one in the last year could the insurer’s alarm bells ring.
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Traveling To Dangerous Places
Some people travel to dangerous places for work. Others do it for the thrill of water or other purposes. The reason for traveling doesn’t matter.
What matters is that you need to let your life insurance company know. If your line of work involves traveling to dangerous places, then you could have high rates.
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Dangerous Hobbies
Do you love scuba diving? What about jumping from a plane at 6000 feet above sea level? If you love such hobbies, then you need to say it.
Although many people lie about this, it doesn’t affect the rates that much.
Insurance companies love to work with your past and not your future.
So, if you plan to dive to the bottom of the Atlantic or climb Mt. Everest, it won’t affect your policy that much.
Type Of Lies On Life Insurance Application
There are two kinds of lies in life insurance applications:
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Lies Of Omission Or Mistakes
Such lies are when someone knowingly or unknowingly omits information critical to the underwriting process. It could be information on their health, income, or family and personal medical history.
It’s a common mistake and shouldn’t get you in trouble if you genuinely forgot to say something. Sometimes life insurance providers want to know details that happened long ago.
Because they are only mistakes doesn’t mean you could get away with it. Some companies will deny you the cover if they discover the omission.
For instance, you might enjoy some nicotine patches and forget that it falls under tobacco use.
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Deliberate Lies
These are blatant lies intending to defraud the insurance company and have them charge you less.
When someone makes these kinds of lies, they haven’t forgotten about the information they’re withholding. They know what they’re doing.
What Happens When Caught Lying On Your Life Insurance Application?
Lying on a life insurance application could have several consequences.
If the insurer discovers the lie before the commencement of the cover, the below could happen.
- Before Issuance of the Life Insurance Cover
- Denial of your Application
Some companies will decide to deny your application if they find out you lied. Others might proceed with the application if it wasn’t a serious lie.
But if they catch you and decide to move forward, they could charge you a higher rate than if you had been upfront.
You can see the extra fees as a penalty for your dishonesty.
Legal Action
Some insurance companies will institute legal action against you if they find out you lied. Such situations are common if they uncover an attempt to defraud them.
Material misrepresentations could land you in hot water.
After Issuance Of The Cover
If the insurer discovers you lied after issuing you the coverage, they still could cancel the cover. It is common practice to have a contestability period for every insurance cover.
The period ranges between one and two years. The insurance company will comb through your information to find any inconsistencies during this time.
If they find any, they have a right to either end your agreement or charge you more.
If they discover the lies after your death, they might calculate the money to pay your beneficiaries according to how it would have been if yod been truthful.
Sometimes they might decide not to pay up because of your lies.
Therefore, lying on your life insurance application could have consequences for the beneficiaries after you die. You wouldn’t want that, so it is always wise to disclose everything.
Do Insurance Companies Always Catch Liars?
If you plan to lie on your life insurance application, don’t. The insurance company will find out. You might consider yourself too smart to get caught, but you will.
Insurance companies have investigators who comb through all bureaus to confirm your information.
Agents will go through every database there is to get information on you.
Government, hospital, and college records will have your information. If they want to get information about your family, they could also get it.
They know the temptation to lie is real. So, they do their homework for every applicant.
As you can see, lying on your life insurance application isn’t worth it.
Frequently Asked Questions
Why Do People Lie Pn Their Life Insurance Applications?
People lie on their life insurance applications to get better rates. Life insurance companies charge more if they see someone as too much risk.
Someone with cancer will get higher rates than someone who doesn’t.
Also, someone younger and relatively healthy will get a great rate. Therefore, people lie about these things to trick the insurance companies into giving them better rates.
It is rarely successful.
Can I Get Life Insurance Even If I Have A Major Preexisting Health Problem?
Yes. Even if you have major preexisting health issues, you can get life insurance coverage.
But you’ll have to contend with higher rates depending on the company from which you seek a life insurance cover.
Do People Who Lie On Life Insurance Applications Go To Jail?
It is rare for someone to go to jail for lying about their life. But the insurance company could blacklist you in the MIB.
Even with a different insurance company, getting another life insurance cover will be difficult.
Final Thoughts
Lying on a life insurance application might seem easy to pull off, but it is fraught with dire consequences. It could lead to steeper premiums, declined applications, or even legal action.
The best thing you can do to get a reasonable rate is work with an excellent insurance agent.
Your agent can evaluate all the rates at most insurance companies to get you one with the best plans for your health.
