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How much you pay for your life insurance policy depends on your unique profile. During the application process, you’ll answer a range of application questions and take a medical exam that provide the insurer with your information about your medical history and lifestyle choices. Your premium will be based on the results.

While it may be tempting to lie on your application in hopes of getting a lower rate, it’s not a good idea. Insurers cross-check your answers with health records, public records, and the MIB database. If they find out you intentionally lied on your application, it will get rejected and recorded in the MIB database. And if they do accept your application, they can deny your family the death benefit claim when you die.

For this reason, it’s best to be as honest as you can. Here are some of the lies people tell life insurance companies that you should avoid.

They don’t smoke tobacco

Smokers pay more than nonsmokers. But if you lie on your application, your insurer can find out through the medical exam or if you find out from a smoking-related disease. In that case, your beneficiaries won’t get the payout.

“We probably see more of this than anything else,” says Brian Ashe, past chairman of the Life and Health Insurance Foundation for Education.

And some applicants may lie unintentionally. Applicants who use nicotine in other forms, such as a nicotine patch or chewing tobacco, may not realize they are in the “tobacco” category.

“In their own minds they are not tobacco users, but in life insurers’ eyes they are,” says Ashe.

If the insurer doesn’t deny your family the death benefit, they may alter the death benefit to be equal to the amount the person would have gotten had they paid tobacco rates.

They don’t have any medical conditions

Neglecting to mention a medical condition like depression is common — depression or anxiety can be impossible to detect by an agent or the paramedical who performs the medical exam. However, any medical diagnosis of depression will be apparent in your medical records. Additionally, insurers check your prescription history, which will show any medicine you take for treatment.

They don’t have any DUIs or moving violations

Applicants are also prone to misrepresenting the number of moving violations they have racked up when they ask for life insurance quotes.

But insurers can easily find out about DUIs and moving violations when the insurance company pulls your motor vehicle record (MVR).

If there is a gross discrepancy between what you say and what is on your MVR, the underwriter will look for other possible material misrepresentations.

Their family’s medical history is perfect

Your family’s medical history can affect your premiums. While it may seem easier to lie about someone else’s medical history, insurers will void your policy if they find out.

They don’t have any major travel plans

Ashe says that some applicants misrepresent their travel plans to countries that are considered dangerous by the state department. Sometimes applicants will admit to travel but misrepresent their travel times.

It’s important to be honest about where you are traveling. If you lie about travel plans and then die in the location you traveled to, insurers might deny the death benefit claim.

They earn more than they do

Some people will lie about their income in order to receive more coverage than they’re eligible for.

Insurers often pull a soft credit report to check how much you earn. If you lied about your income on the application, they will find out. They may also ask applicants to fill out a financial supplement that details assets, liabilities and other information.

How to protect your life insurance policy

The best way to protect your coverage is to be honest on your life insurance application.

Insurance companies check various records to make sure you’re telling the truth on your application. This includes

  • MIB report
  • Motor vehicle report
  • Doctor’s records
  • Prescription records
  • Credit reports
  • Autopsy report (after death)

If misrepresentations or omissions are found by an insurer before the policy is issued, the insurance company will adjust your rate accordingly based on the truth. But an intentional lie will also cast doubt on the rest of your application, which could compel the insurer to examine everything more closely and possibly delay or reject your application.

Lies discovered after a policy is issued can come back to bite an applicant. Any lie caught within the two-year contestability period of a policy can cause the insurer to scale down the death benefit or even rescind the policy, depending on state law.

Ashe points out that a life insurance application becomes part of the legal document that is the policy. So lies within the application become fraud.

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