When applying for a life insurance policy, applicants are required to submit a variety of identifying and personal information. This typically includes details about their health, lifestyle, and family history, which insurance providers use to assess risk. Depending on the applicant's health and lifestyle, the insurer can calculate a policy quote that balances appropriate coverage with the potential risk of an early death, which would lead to the insurer paying out more than they’ve collected in premiums.
Given the complexity of these calculations, it’s crucial that all the information provided during the application process is accurate. Some individuals, however, may choose to misrepresent their health or lifestyle in order to obtain more favorable terms, such as lower premiums or higher coverage amounts. While this might seem tempting, we strongly advise against this. Misrepresenting any information on your life insurance application can ultimately harm your beneficiaries, as their claim could be denied upon your death.
What is a Material Misrepresentation?
If a life insurance provider suspects that a policyholder has made a material misrepresentation during the application process and the policyholder unexpectedly passes away, the provider may initiate an investigation before issuing any death benefits. If the insurer uncovers evidence of misrepresentation, they may deny the claim, leaving beneficiaries without the financial support they were relying on. This would mean that all the premiums paid into the policy would be retained by the insurer, without any payout to the beneficiaries, which can be devastating for those left behind.
A material misrepresentation is generally defined as a fact that has been intentionally misstated or concealed in a way that would have significantly affected the terms of the life insurance contract. For example, a material misrepresentation might include:
Misstating your age by a large number of years.
Failing to disclose a major medical condition such as a chronic illness or terminal disease.
Concealing a high-risk lifestyle, such as engaging in dangerous hobbies or having a history of alcohol or drug abuse.
While some applicants may believe that small omissions or inaccuracies won’t matter, insurance providers rely on having a complete and accurate picture in order to set appropriate policy terms. A minor misstatement could result in a policy being issued at a lower premium or a higher coverage amount than is appropriate for the risk involved. As a result, this may place the insurer at a disadvantage if the policyholder dies unexpectedly.
Why Accuracy Matters
It’s important to keep in mind that life insurance is meant to provide financial security for your loved ones after your death. By being truthful and accurate on your life insurance application, you help ensure that the financial support your beneficiaries receive will be available when they need it most. The short-term savings from misrepresenting your information are not worth the long-term consequences if your beneficiaries are left without the payout they deserve.
If your life insurance claim has been delayed or denied due to material misrepresentation or any other reason, our experienced life insurance attorneys can help. We work tirelessly to ensure that you get the full amount of the policy and the financial security your family deserves.
Call Us for a Free Consultation
If you are facing a delayed or denied life insurance claim, don't accept the decision without exploring your options. Contact our knowledgeable attorneys today for a free consultation. We specialize in challenging denied claims and will fight to ensure that you receive the payout your loved one intended for you.