Mortgage lenders and life insurance companies often require life insurance policies to protect them and their customers. When an individual applies for a life insurance policy, they have to provide certain information to the insurance provider. The accuracy of the information is important in determining the individual’s premium and coverage amount. Lying on a life insurance application can be tempting, but the consequences can be severe.
Consequences for Lying on a Life Insurance Application
- Your policy can be canceled and your funds withheld. If an insurance provider finds out that an individual lied on an application, they may opt to void the policy or outright cancel it. This means the individual will not receive any death benefit nor will any premiums be returned.
- You may be required to pay back premiums. Even if the policy is not cancelled, the insurance company can decide to adjust the premium rates based on the inaccurate information provided. This means that the individual has to pay back premiums that were calculated based on the false information.
- You can be held liable to pay any claims made under the policy. If the policy is not terminated or cancelled, the insurance provider can still make a claim on the ill-gotten policy. The individual who lied on the application can be held liable to pay any claims made under the policy.
Preventing Consequences for Lying on a Life Insurance Application
The best way to prevent the consequences of lying on an insurance application is to provide true and accurate information. Lying on an insurance application can be tempting, but it is ultimately illegal and can have severe financial and legal ramifications.
It is important to note that life insurance companies investigate claims and applications. They frequently look into the applicant’s past medical history, personal lifestyle and overall financial situation for possible discrepancies. It is always a good idea to go over the application with a lawyer or financial advisor to ensure accuracy before submitting it.