What Is Misrepresentation in a Life Insurance Application?
Misrepresentation occurs when a life insurance applicant provides false, incomplete, or misleading information that materially affects the insurer’s decision to issue a policy. The application process requires the disclosure of a wide range of details—medical history, lifestyle habits, employment status, income, and more. Insurers rely on this information to determine risk and set premiums. When discrepancies are later discovered—especially if they relate to health or personal habits—the insurer may claim that it would not have issued the policy had it known the truth.
Types of Misrepresentation That Can Lead to Claim Denials
Not all misrepresentations are alike, and not all will result in claim denial. However, insurers frequently cite the following areas when attempting to rescind a policy:
Medical History Omissions: Failing to disclose a known diagnosis (such as diabetes, heart disease, cancer, or mental illness) or prior hospitalizations.
Lifestyle Factors: Misstating or denying smoking, alcohol use, drug use, or participation in high-risk hobbies such as scuba diving or skydiving.
Family History: Leaving out hereditary conditions that may suggest a higher risk of early death.
Financial Misstatements: Overstating income or understating debt, especially when applying for high-value policies.
Even minor errors—such as incorrect dates or unintentional omissions—can trigger accusations of misrepresentation, especially if the insured dies within the policy’s contestability period.
The Contestability Clause and How It Works
Most life insurance policies include a contestability period, typically the first two years after the policy is issued. If the insured dies during this period, the insurer has the right to investigate the application for misstatements or omissions. If they uncover what they deem a material misrepresentation, they may attempt to rescind the policy—voiding it as if it never existed—and return only the premiums paid. Outside the contestability window, insurers must prove actual fraud to deny a claim, which is a much higher burden.
How Misrepresentation Affects Beneficiaries
When a claim is denied due to misrepresentation, the financial blow to beneficiaries can be devastating. Families often rely on the death benefit to pay for mortgages, college tuition, funeral costs, or general living expenses. Without it, they may face overwhelming debt or lose their homes. Worse still, the legal fight can drag on for months or years—especially if the insurer claims the application was filled out fraudulently or with intent to deceive. In these cases, beneficiaries are often left feeling helpless, especially if they had no involvement in the original application process.
Why Legal Representation Is Critical
Insurers do not always act in good faith. In many cases, we’ve found that denials based on misrepresentation are based on weak evidence or exaggerated claims. Our firm carefully reviews the original application, the medical records, and the insurer’s investigation to determine whether the denial is legally justified. We fight back by showing that the alleged misrepresentation was not material, that the insured acted in good faith, or that the insurer waived its right to contest the claim by failing to conduct a reasonable underwriting review. We have successfully reversed denials in cases where insurers attempted to exploit technical errors or minor discrepancies to avoid paying.
We Fight and Win Denied Life Insurance Claims
Our law firm handles all types of denied life insurance claims, including those involving alleged misrepresentations, contestability disputes, policy lapses, beneficiary conflicts, and interpleader lawsuits. We also represent families dealing with denied FEGLI and SGLI claims for federal employees and service members. Whether your case involves a private insurer or an employer-sponsored policy governed by ERISA, we can help you recover the full policy amount.
FAQ: Denied Life Insurance Claims Due to Misrepresentation
What is a material misrepresentation? A material misrepresentation is an omission or false statement on an application that would have affected the insurer’s decision to issue the policy. If it’s deemed material, the insurer may try to void the policy.
Can an honest mistake result in claim denial? Yes, especially during the contestability period. Even unintentional errors—like forgetting to mention a doctor’s visit—can be used as grounds for denial. We challenge these claims by proving lack of intent or immateriality.
What is the contestability period in life insurance? It’s a limited time (usually two years) after the policy begins during which the insurer can investigate and deny claims based on misstatements. After that period, only fraud can be used as a reason to deny.
How does an insurer prove misrepresentation? Insurers typically compare the application with medical records, pharmacy data, or third-party reports. If they find discrepancies, they may argue the policyholder misrepresented key facts.
Do I have to accept a misrepresentation denial? No. These denials are often challenged successfully in court or through negotiation. Our firm frequently proves that the misrepresentation was immaterial or that the insurer waived its right to deny the claim.
What if the policyholder didn’t know about a medical condition? If the policyholder genuinely didn’t know about a diagnosis or had no symptoms, it may not qualify as misrepresentation. Insurers must prove the applicant knowingly withheld information.
Does misrepresentation affect group life insurance? It can. Employer-provided group life policies may still deny claims for misstatements on supplemental coverage applications. These policies often fall under ERISA and require specialized legal knowledge.
What evidence is needed to appeal a misrepresentation-based denial? We use the application, the insurer’s underwriting file, medical records, expert opinions, and correspondence to build a strong case. Each piece helps prove the insured’s intent and the relevance of the alleged misstatement.
Can a misrepresentation claim be reversed without going to court? Yes, many denials are resolved through appeals or negotiations. However, if the insurer remains unreasonable, we are fully prepared to litigate and recover the full policy amount.
What does it cost to hire a life insurance attorney? We work on contingency—you don’t pay us unless we recover money for you. Your initial consultation is free, and we handle all communication with the insurer.