Please Don't Lie on That Insurance Application

Ben Glass

Attorney
(866) 735-1102 Ext 320

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Every year our firm is asked to evaluate a handful of life insurance claims. Usually the life insurance company has denied a claim based on information about the decedent's health that was not disclosed when he/she made the application for the insurance.

In a recent case a man left a wife and three young children. His family thought he had left them adequate insurance coverage. Instead they ended up losing their home.

What happened? He failed to disclose a prior history of illicit drug use when he applied. His death was probably not related to drug use (he had been clean for years) but the law (at least in Virginia) is pretty clear that if you make a misrepresentation that was untrue and material to the risk the insurance company can legally deny the claim.

When you die the life insurance company is going to look for a way to deny the claim. All they have to show is that your misrepresentation likely would have influenced it in deciding whether to issue the policy. As you can imagine, that's not all that hard for the insurance company to prove, especially if what you hid is illegal past drug activity.

Being dishonest when applying for any type of insurance almost always comes back to bit you (or your loved ones.)