Denied Life Insurance Claim Due to a Misstatement? Here's What You Need to Know
We’ve all heard the saying, “honesty is the best policy.” When it comes to applying for life insurance, this couldn’t be more true. Even seemingly harmless omissions or small inaccuracies on a life insurance application can result in devastating consequences later on—most notably, a denial of benefits when your family needs them most.
Many people don’t realize that a life insurance policy is more than just a financial product—it’s a legally binding contract. And like any contract, if one party is found to have entered into the agreement under false pretenses, the entire arrangement can be called into question.
In this blog, we’ll explain how so-called “material misrepresentations” work in life insurance law, how insurers use them to deny valid claims, and what you can do if your claim was denied based on this issue.
Why Insurance Companies Care About the Truth
To understand why a seemingly small lie can void a life insurance policy, consider this example outside the world of insurance.
Let’s say someone sells you a sailboat, swearing it has never leaked or been in an accident. You take them at their word, sign a contract, and start making payments. Then, weeks later, the boat sinks due to an unseen crack that had existed all along. Would you still be legally obligated to continue paying for that boat?
Of course not.
That’s because the seller committed fraud by misrepresentation. You relied on their statements to make a major financial decision. The law calls these kinds of lies material misrepresentations—falsehoods that, had they been known, would’ve changed the other party’s decision to enter into the contract.
Insurance companies apply this same principle when evaluating policy applications. If you provided inaccurate or incomplete information about your health, lifestyle, or history—and the insurer believes it would not have issued the policy had the truth been known—they can deny your beneficiaries’ claim after your death.
Common Examples of Material Misrepresentation
It’s easy to assume that only serious lies would cause problems—but even minor inaccuracies can be weaponized by insurers.
Here are common examples of material misrepresentation:
Indicating you're a non-smoker, even though you occasionally smoke socially
Claiming you exercise regularly, when you rarely do
Stating you have no medical history of anxiety or depression, when you’ve been treated in the past
Failing to disclose a DUI or a history of reckless driving
Forgetting to mention prescription medications or past surgeries
You might think these details are irrelevant or too minor to matter—but insurers take them seriously, especially if they could increase your risk profile.
Does It Matter If the Lie Had Nothing to Do With the Death?
Unfortunately, no—at least not from the insurance company’s point of view.
Suppose you failed to disclose occasional smoking, but the insured died in a car accident years later. Even though the death had nothing to do with smoking, the insurer might still deny the claim. Their argument? That had they known the truth about the smoking, they wouldn’t have issued the policy—or would have charged a higher premium.
In their eyes, the entire contract is void because it was built on false or incomplete information.
Can You Fight a Denial Based on Material Misrepresentation?
Yes, you absolutely can—and in many cases, you should.
There are multiple defenses against this type of denial. One powerful argument is based on the concept of waiver. If the insurer had access to the relevant information—such as lab results showing nicotine in the applicant’s system—but still issued the policy, it may have forfeited its right to deny the claim later on.
Other potential defenses include:
Clerical errors: The misrepresentation was due to a mistake by the agent or representative filling out the application.
Immaterial misstatements: The incorrect information would not have changed the insurer’s decision to approve the policy.
Ambiguous application questions: If a question was vague or open to interpretation, the insurer may be held responsible for not seeking clarification.
Post-contestability protection: If the policy is more than two years old, many states limit the insurer’s right to deny claims except in cases of outright fraud.
The key is knowing your rights and having an attorney who understands the tactics insurers use to avoid paying valid claims.
Don’t Let the Insurance Company Have the Final Word
If you’ve had a life insurance claim denied due to a supposed material misrepresentation, don’t give up. These denials are often based on questionable grounds—and many are successfully overturned with the help of experienced legal counsel.
Our team specializes in denied life insurance claims. We’ll review the application, the denial letter, and any supporting documents to determine whether the insurer’s actions are valid—or whether they’re simply trying to avoid a payout.
We know how to spot bad-faith tactics, how to argue against vague policy language, and how to hold insurers accountable in court if necessary. Best of all, we don’t charge a fee unless we recover money for you.
Contact us today for a free consultation. Let us help you get the life insurance benefits your loved one intended for you to have.