Lying On A Life Insurance Application | Think You Can Pull The Wool?
By Angela Sanders Tuesday, April 15 2014 @ 06:21 AM EDT
Everyone wants loads of premium life insurance to use as a powerful financial tool while they're alive; and to pay out a very helpful death benefit when they pass. Now life insurance is not free, and so there is some consideration that must be given as to the amount of life insurance desired, and the amount that you can actually afford to pay for (check out this link to learn more). As a result of this excessive demand, coupled with limited finances to buy it, there arises lying on life insurance applications.
It's true: people lie. They want that life insurance coverage, but, you know, times are tight, right? So they tell lies on their applications – and then hope the pull the wool over the company's eyes tight enough that it will never slide up to reveal the truth. But they should consider at least a couple things first:
- We live in an electronic age where insurance companies are privy to mass amounts of information; about you, about your family, about a lot of things you might not think that they are privy to.
- Insurance companies have a lot of resources, financial and otherwise. They have been around, shaping macro business scenarios, for a long time. They are technologically advanced, powerful entities that have seen it all. And it's true that they have heard all the lies that you may consider telling them.
- Life insurance companies have people, smart people, working for them. They use these smart people to check out the information that is provided to them, in trust, on their applications for life insurance coverage.
- Most of the time, instead of lying, if you tell the truth, you can still get life insurance coverage. It may just cost more. If you lie and get caught, you will not get any coverage at any price.
The 3 Most Common Lies Told On Life Insurance Applications
Lie #1: I do not smoke or use tobacco products.
If you lie about tobacco use, and get away with it and are granted a life insurance policy, and then pass away from a tobacco-related disease, your coverage could be completely voided. Most life insurance companies will be very likely to press this issue if the policy remains in the contestation period. The least that will happen is that the coverage will be reduced to make up for the difference between what was paid in and what should have been.
Lie #2: I have not had any traffic moving violations.
The life insurance companies hear this all the time, and of course they check, and of course they catch most people that tell this lie. A simple check with the BMV makes them privy to the info. Don't take it personally. It's just the way the actuaries dictate that premiums are based. If you show dangerous driving habits, you enter into a bracket that is more probable to die via an auto accident. That means you have to pay more for the coverage. So just be proud of your lead foot – and fess up from the start. They'll find out anyway.
Lie #3: There has been no cancer in my family.
Again, they are going to hop on their computer terminals, check in with medical care providers, and clearly see if there is any history of cancer running in your family. If there is, then those same actuaries say you have to pay more. For all those who are truly fortunate enough to not be affected by cancer in their families, they should not have to pay more for their insurance because of that. Right?
The point is that lying to life insurance companies is not a wise move. There's just no real reason for it. Insurance coverage is available to you, and just about everyone else, for a price. The price for yours will depend on the truthful answers you provide on the application form.