Insurance companies understand that mistakes happen and that you may not remember every piece of your medical history. Simply guessing your weight or forgetting a prescription 10 years ago does not likely constitute insurance fraud. But intentionally misrepresenting yourself, your medical history, and any pre-existing conditions you have is. Keep reading to see why people sometimes lie on their life insurance applications, how lies are detected, and the consequences of these lies.
Common Lies on Life Insurance Applications
Lying on your insurance application is more common than you may think. It’s usually done to obtain cheaper rates or out of fear of being denied coverage. Here are the most common lies:
Age – It’s no secret the older you are, the higher your premiums will be. Lying about your age is the one of the easiest lies to detect because your application will also include documents to verify your birth year.
Pre-existing medical conditions – Some may be tempted to omit prior medical conditions on their life insurance application thinking the insurance company may not find out. Common lies include omitting high cholesterol or a previous battle with cancer.
Current or previous prescriptions – It’s one thing to forget a prescription you took many years ago, but it’s another to intentionally omit a previous prescription in an attempt to hide pre-existing health conditions.
Family medical history – An individual may say they have no family history of heart disease, while one of their parents or grandparents passed away from a heart-related condition.
Annual income – Some may lie about their annual income to obtain a cheaper rate or ensure approval.
Drug and tobacco use – Former smokers may be tempted to say they’ve never smoked or current social smokers may be tempted to leave that out of their application.
Mental health – For some, mental health seems completely separate from their physical health when filling out a life insurance application. However, mental health is a life insurance consideration.
How Lies Are Detected
Many insurance companies require you to submit a medical exam before issuing a policy. Your weight, age, and blood pressure are recorded during this medical exam. Blood, urine, and hair samples are often collected and sent off to a lab. If you lied about your weight or conditions such as high blood pressure on your life insurance application, the medical exam will pick up on this. But what about previous prescriptions or prior health conditions? How does the insurance company find out? Insurance companies go through various databases to verify the authenticity of your application and they have ways of discovering if you have been untruthful.
MIB – The Medical Information Bureau (MIB) is a database that holds information for every insurance application you have submitted in the last seven years. If you have been untruthful on a prior application, that will show up in your report and you will likely be denied coverage. If you are unsure what is on your MIB report, you can request a copy here.
Doctor(s) records – Part of the medical exam will be verifying your health status by requesting your medical records. If you had put down that you didn’t have a history of high blood pressure, it will likely be discovered during this process.
Pharmaceutical databases – Life insurance companies will often request information from pharmaceutical databases to see your current and prior prescription history. If you forgot about a medication you had taken many years ago, this might not be a big deal if the medicine was for a minor injury or short-term condition. However, it is insurance fraud if you excluded medications for ongoing health conditions on your application.
Social media – More and more insurance companies are turning to social media to look further into your lifestyle.
Driving record – Insurance may pull your driving record to check for any indicators that may point to a reckless lifestyle. Things like DUIs, speeding tickets, and accidents may increase your monthly premiums.
Consequences of Lying on Your Application
So, what happens if you get caught lying on your life insurance application? While it’s considered insurance fraud, you are unlikely to face jail time. If the lie was caught during the underwriting process, it’s likely that you will be denied coverage. This information will be reported to the MIB, making it difficult to obtain a policy in the future.
If you pass away within the first two years of obtaining your policy and your death due to a pre-existing health condition that was not listed on your application, your claim will likely be denied. Your beneficiary would receive no death benefit. You would have paid for insurance that is rendered useless.
How Can I Ensure I Have All of the Appropriate Information?
To avoid any mistakes on your application and ensure that your beneficiary receives the death benefit, there are a few steps you can take.
- You can request your medical records to verify that you have all your information, such as your medical history and family medical history.
- You may request a copy of your MIB report to ensure that you include all your information and to dispute any discrepancies you find.
- Be sure to gather all records you may have prior to filling out the application so nothing gets left out. While having pre-existing conditions may cause you to have higher premiums, it’s still better than to be left without any coverage at all.
Contact Americo Senior Life
Americo Senior Life has the experience to help navigate the details of the industry. We consider ourselves experts when it comes to life insurance policies for seniors. We can help you obtain an affordable life insurance policy. If you have questions about your policy, call us at (855) 869-3952 or go online for your free quote today!