What Happens When You Lie On A Life Insurance Application?

  1. 16470 POINTS
    David Osgood
    Agent, Rural Mutual Insurance Co., Union Grove, WI
    Many things could happen from lieing on a life insurance application. Depending on when the lie is found out about. Reprecusions could be as minor as having the application denied to as severe as criminal prosecution. If the lie is discovered after the death of the insured the the death benefit would more than likely not be paid by the carrier; the most that the carrier would typically be responsible to pay under these circumstances would be the total premium paid in over the lifetime of the policy. If the policy death benefit had been paid already then the carrier will typically request the amount paid back ( possibly less the total premiums paid ) and then may seek criminal procescution. It is best to be as honest as possible during the application process as there is lot of information that is checked and double checked with many sources.
    Answered on June 20, 2013
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    David RacichPRO
    Fountain Hills, Arizona
    There are two types of lies to consider when you’re about to commit fraud: a misrepresentation of the truth and the omission of a material fact. Forms of fraud can be grounds for claim denial and possible criminal charges in business scenarios where other individuals or institutions relied on your coverage to indemnify them. 
     
    Answered on June 28, 2013
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