What happens if you lie on your life insurance application

If you lie on your life insurance application, you could have your application canceled, render yourself uninsurable, and leave your family unprotected.

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Headshot of Katherine Murbach

By

Logan SachonSenior Managing Editor, Life Insurance & ResearchLogan Sachon is a former senior managing editor of life insurance and research at Policygenius. As a journalist, her work has appeared in The Guardian, Business Insider, CNN Money, BuzzFeed, Money Under 30, VICE, New York Magazine, and elsewhere.&Katherine MurbachEditor & Licensed Life Insurance AgentKatherine Murbach is an editor and a former licensed life insurance agent 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.

Edited by

Antonio Ruiz-CamachoAntonio Ruiz-CamachoAssociate Content DirectorAntonio helps lead our life insurance and disability insurance 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 is fraud. But it’s important to note that the lie needs to be intentional to be considered fraud, also known as “material misrepresentation.”

Simply mis-remembering a date, guessing at your weight, or forgetting a diagnosis doesn’t mean automatic insurance fraud.

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 do 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 you give to the insurance company on your application isn’t the only information they use to evaluate you.

During underwriting, insurance companies evaluate a wide array of sources to assess the risk of insuring you and determine your premiums.

This includes 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 (MIB).

Any lies 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 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, your application could be rejected. That rejection would also likely be logged in your MIB report, 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. This could be enough for them 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 reflect the full details of your health profile as opposed to your original quote.

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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 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.

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.

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.

More about the life insurance application process

Corrections

No corrections since publication.

Authors

Logan Sachon is a former senior managing editor of life insurance and research at Policygenius. As a journalist, her work has appeared in The Guardian, Business Insider, CNN Money, BuzzFeed, Money Under 30, VICE, New York Magazine, and elsewhere.

Katherine Murbach is an editor and a former licensed life insurance agent 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 helps lead our life insurance and disability insurance 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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