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Consequences of Lying on Your Life Insurance Application

Of course, many of you understand the impulse to tell a little white lie on a life insurance application—or any insurance application for that matter. It’s right there and it’s so easy to check the “I’m Not a Smoker” box, or the “I Have No Previous Medical History” box and potentially save hundreds of dollars every year.

kaiser health news google images
Despite how easy it is, dealing with the repercussions of lying has a negative ripple effect. The worst part of lying on your insurance application is the impact on your loved ones. Your lies create problems for those you initially want to protect. One little white lie can sabotage the entire purpose of life insurance! Is it really worth the risk?

What are Considered Lies?

First off, it’s important to understand what is and what is not considered a lie in the eyes of a life insurance company. By checking insurance websites you can get a lot of information and guidance. Visit Suncorps website to get a life insurance quote today – they’re able to create a package to meet your specific needs.

Warranty and Representation

Warranty and Representation are the two sides of the “this is false” coin and it’s important to understand the difference.

A warranty item is something that you know to be true, that you can guarantee, and that your signature signs off on as truth.

o For example; When asked on your application if you’ve previously had any heart conditions, you check “no”; then, later, the insurance company discovers that you had open heart surgery prior to application acceptance.

A representation item is something that you believe and know to be true, to the best of your ability, upon submission of the application, but can’t guarantee or know to be a fact.

o For example; When asked on your application if you’ve previously had any heart conditions and you check “no”; then, after your acceptance, you’re diagnosed with a major valve blockage that existed prior to your application, but without your knowledge.

If a life insurance company finds something on your application to be false, they will:

Classify the item as either a warranty or representation item.

For a warranty lie, the insurer will do the following if caught:

o Upon Application Submission: They have the immediate right to void your contract, on the spot; this means that your application will not only be rejected, but you’ll also be put on the radar with other insurance companies as a risk.

o Within 2 Years: If the insurer catches the lie later, after you’ve already had the policy for some time, they will void the contract and refund your premiums.

o After Death: If an investigation was launched due to your death, raising a red flag on some component of your application (i.e. you die from lung cancer due to smoking when you claimed to be a non-smoker), and it is determined that this was a warranty lie, your loved ones may have their claim completely denied, or they may receive only a partial payout in the form of refunded premiums.

For a representation lie, the insurer does not have the right to void your contract except in very specific instances (i.e. this particular item was the sole reason that carried favor for your acceptance).

The bottom line, if you want to collect on your insurance in the future, tell the truth on your application.

Have you ever come across anyone who was involved in insurance fraud? Have you ever thought (just for a moment) about lying on an insurance application, don’t worry, I won’t tell anyone.

image credit; google images_kaiser health news


  1. Have I thought of telling a little white lie on my insurance docs? yes! Would I do it? Definitely not. At the end of the day I think honesty is the best policy. It might hurt at the moment, you might have to pay higher premiums, but you can be at peace knowing that your loved ones won’t be dragged through hell getting the insurance claims. And isn’t that peace and comfort for you and them the point?

    Simon @Modest Money

    July 19, 2013

  2. Would I ever lie on an application? No way! Insurance or otherwise. Insurance companies look for ways to not pay claims.


    July 19, 2013

  3. I’ve always thought that it would probably be really easy to get away with lying as long as it’s not huge…then I sit back and realize that there are probably tens of thousands of convicted felons sitting in their jail cells who at one point probably had the same ‘I can get away with it’ thinking. Bottom line is that you’re going to get caught, so just be honest, and if you are lying about something, it’s probably best to take it as a wake up call to make some changes.

    Money Beagle

    July 19, 2013

  4. @Simon, Krantc, & Money- It’s hard enough to collect a claim when it is owed to you. I think we’re all in agreement that lying on your life insurance is really stupid! BTW, I’m sure you’ve watched “Law & Order” and seen the episodes where killing for the insurance money doesn’t work. Another “no, no”.

    Barbara Friedberg

    July 19, 2013

  5. Lying on an insurance application is just completely useless. What is the point of paying for something that is a lie and potentially will become void. They can find out what they need to, if they have to. When we filled our life insurance applications we just told them everything, that way they couldn’t say we didn’t tell them. We were tested for all sorts. When we quit smoking last year we went back after one year to get a better rating on our policy. Our policy was cut in half and it was all documented through our doctor.If you want to leave something behind for loved one’s don’t let them be shocked with lies and a voided contract.

    Canadian Budget Binder

    July 20, 2013

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