What happens if you lie on your life insurance application

Logan Sachon


Logan Sachon

Logan Sachon

Senior Managing Editor, News & Research

Logan Sachon is the senior managing editor of news and research at Policygenius, where she oversees our insurance and financial news, surveys, and data studies. Previously, she co-founded The Billfold, a groundbreaking personal finance site for millennials named one of TIME's 25 best blogs of the year.

Published|2 min read

Policygenius content follows strict guidelines for editorial accuracy and integrity. Learn about our editorial standards and how we make money.

Let’s get to the point. Lying on your life insurance application is fraud.

But, the lie needs to be intentional to be considered fraud, known as “material misrepresentation.” Simply mis-remembering a date, guessing at your weight or forgetting a diagnosis doesn’t mean insurance fraud. So don’t worry about that.

But if you try to intentionally deceive a life insurance company, you could have your application canceled, render yourself uninsurable and leave your family unprotected.

Read more about what constitutes insurance fraud.

Why lies on life insurance applications get caught

Not only is lying on your insurance application fraud, it’s also almost impossible to get away with. That’s because the information that you give to the insurance company on your application isn’t the only information they use to evaluate you.

Insurance companies evaluate your motor vehicle report, prescription history, the results of the life insurance medical exam, statements and records from your doctors — and your profile on the Medical Information Bureau (more on this later).

Any lies will likely become exposed through these documents. If you say that you don’t smoke but your blood and urine results reveal byproducts of nicotine, then the insurance company knows you lied. Likewise, if you say that you’re not on any prescription medications even if you are, your prescription check will reveal the truth.

What happens if your lie is caught during the application process

If your lie is caught while you’re still in the application process, it’s very likely your application will be rejected. That rejection would also likely be logged in Medical Information Bureau (MIB), the clearinghouse used by life insurance to discourage fraud.

Insurance companies check the MIB as part of the underwriting process, so if you tried to apply with a different insurance company, they’d be alerted that you’d lied on a previous application, and could decline your application on that basis.

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

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

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

Every life insurance company has a two-year contestability period If you die during this period, the company reserves the right to reevaluate your application. If at that point they find out that you lied, they could cancel your coverage, meaning that your beneficiaries wouldn’t get the death benefit and would be left unprotected.

Basically: the consequences of lying on your life insurance application are never good and can leave your family unprotected.

It’s best to be truthful and open from the start, even when getting quotes online, because the more honest you are, the more accurate your initial quotes will be.

Curious about life insurance? Here are the answers to some common questions.

Image: Hero Images