Why You Should Never Lie to the Underwriter

Insurance premiums are based on the risk someone poses to an insurance company. The higher risk you are, the higher the premium an insurer may charge. This may lead someone to lie on their applications to receive a lower rate.

But doing so can have some serious consequences!

When applying for life or health insurance, applicants may be tempted to lie about various aspects of their current state of health. The most common questions insurers find applicants lying about include:

• Age
• Weight
• Income
• Drug use
• Occupation
• Alcohol use
• Tobacco use
• Mental health
• Driving record
• Medical history
• Travel destinations
• Dangerous hobbies

Shortly after receiving your application for insurance, underwriters begin to review the information provided. Part of an underwriter’s job is to be a detective, determining if all the information provided is accurate and true.

In today’s online world, insurance companies have access to more data than ever before. Of course underwriters will review your medical exam and records. But they can also look at public information available on the internet such as your employer’s website and social media platforms.

For life insurance policies, if an applicant lies on an application and passes away within the first two years, the life insurance benefits can be denied. Health insurance policies may deny paying medical bills if they learn you hid preexisting medical, mental, or substance use conditions.

But perhaps the biggest deterrent to keep someone from lying on an insurance application is the possibility of going to jail. That’s right, intentionally lying on insurance application is considered fraud. Depending on the state, insurance fraud can be punishable by up to 5 years in prison, five years’ probation, and a $5,000 fine.

Insurance is a product we buy and hope we never use. But risking the protection insurance provides isn’t worth the risk.