What happens if you lie on your life insurance application?

If you lie when applying for life insurance, you could have your application rejected, render yourself uninsurable, and leave your family without the protection of a policy. It’s always in your best interest to be honest on your life insurance application.

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Tory CrowleyAssociate Editor & Licensed Life Insurance AgentTory Crowley is an associate life insurance and annuities editor and a licensed insurance agent at Policygenius. Previously, she worked directly with clients at Policygenius, advising nearly 3,000 of them on life insurance options. She has also worked at the Daily News and various nonprofit organizations.&Katherine MurbachEditor & Licensed Life Insurance AgentKatherine Murbach is a life insurance and annuities editor, licensed life insurance agent, and former sales associate at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.

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Antonio Ruiz-CamachoAntonio Ruiz-CamachoAssociate Content DirectorAntonio is a former associate content director who helped lead our life insurance and annuities editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.
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Reviewed by

Maria FilindrasMaria FilindrasFinancial AdvisorMaria Filindras is a financial advisor, a licensed Life & Health insurance agent in California, and a member of the Financial Review Council at Policygenius.

Updated|3 min read

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Lying on your life insurance application on purpose is considered fraud — also known as “material misrepresentation.” Simply mis-remembering a date, guessing at your weight, or forgetting a diagnosis doesn’t mean you’re committing insurance fraud.

But if you try to intentionally deceive a life insurance company, you could face serious consequences. The insurer could cancel your application, you could make yourself uninsurable with other companies, and ultimately, you could leave your family without the financial protection they need when you’re gone. 

Read more about what constitutes insurance fraud

Why would you lie on a life insurance application? 

People lie on life insurance applications to get better life insurance options. Generally, there are three motives for lying on a life insurance application: 

  • To get more life insurance: The amount of life insurance you can apply for is based on your age and income. If you say your income level is higher than it actually is, it’ll raise the ceiling on how much insurance you can get. 

  • To get cheaper life insurance: The more the insurer thinks you’re a mortality risk, the more expensive your life insurance will be. Many people omit or downplay information they share on a life insurance application, in an effort to get cheaper rates. This is especially true when it comes to people’s health histories. 

  • To get approved: Certain aspects of your health and lifestyle can disqualify you from getting life insurance at all, like having a recent felony conviction or participating in a hazardous activity like bungee jumping. If you share facts like these when you apply, you may not be able to get a policy right away, but omitting them could have greater consequences, like being charged with fraud. 

How do lies on life insurance applications get caught?

Not only is lying on your insurance application considered fraud, but it’s also almost impossible to get away with it. That’s because the insurer will verify all of the information you provide. 

Insurers evaluate a wide array of sources to assess the risk of insuring you and determine your premiums. This includes:

Any inconsistencies on your application will likely become exposed through these documents. For instance, if you say that you don’t smoke, but your blood and urine results reveal byproducts of nicotine, then the insurance company will know you lied.

Likewise, if you say that you’re not taking any medications even if you are, your prescription check will reveal the truth.

What happens if your lie is caught during the application process?

If you’re caught lying while you’re still in the application process, your application could be rejected. That rejection would also likely be logged in your MIB report, the clearinghouse used by life insurance companies to discourage fraud.

Insurers check the MIB when evaluating your application, so if you tried to apply with a different insurance company, the insurer will be alerted that you’d lied on a previous application. This could be enough for it to decline your application.

It’s also possible, depending on the severity of the lie, that the insurance company will grant you a policy at a higher rate.

If you merely forgot to disclose a medical condition or prescription, your final rates will take into account your corrected information, which will probably result in a more expensive rate. 

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What happens if your lie isn’t caught during the application process?

If your lie somehow makes it through the application process and you’re able to get an active policy, there’s still a chance the insurance company could find out.

Every major life insurance company has a two-year contestability period. The contestability period holds that if you die during that time window, the company reserves the right to re-evaluate your application for any inconsistencies.

If at that point the insurer finds out that you lied, it could cancel your coverage, meaning that your beneficiaries wouldn’t get the money from your insurance policy that you intended for them.

Generally speaking, you shouldn’t lie on your life insurance application because it’s a form of fraud and will likely have negative consequences for you and your loved ones. One of the main reasons to get a life insurance policy is to have peace of mind, knowing your family will be financially supported if you die. Lying on your application puts that assurance in jeopardy. 

More about the life insurance application process

Corrections

No corrections since publication.

Authors

Tory Crowley is an associate life insurance and annuities editor and a licensed insurance agent at Policygenius. Previously, she worked directly with clients at Policygenius, advising nearly 3,000 of them on life insurance options. She has also worked at the Daily News and various nonprofit organizations.

Katherine Murbach is a life insurance and annuities editor, licensed life insurance agent, and former sales associate at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.

Editor

Antonio is a former associate content director who helped lead our life insurance and annuities editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.

Expert reviewer

Maria Filindras is a financial advisor, a licensed Life & Health insurance agent in California, and a member of the Financial Review Council at Policygenius.

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