Sometimes, lies are warranted: a little white lie might save you from hurting your friend’s feelings or get you out of being the room parent, with no one the wiser. But there are times when lying is not only unethical but it can be financially harmful, or even potentially illegal. A life insurance application is one place where you want to be completely honest with your answers because it could seriously impact your family’s future finances. If you intend to provide for your family financially in the unlikely event you pass away through a life insurance policy, then lying on a life insurance application is not in their best interests.
Some people think that lying will get them a more favorable outcome, such as a lower premium or coverage that they think they otherwise wouldn’t get, but in the end, it ends up hurting you and your beneficiaries the most.
What happens if I lie on a life insurance application?
Lying on a life insurance application is called misrepresentation. This means that you’ve provided false or purposely misleading information to an insurance company. Life insurance companies can take action against those who have misrepresented themselves by:
- Denying coverage, which means you won’t have coverage
- Rescinding the policy, which means you won’t have coverage
- Denying a claim, which means your beneficiaries won’t receive a payout
- Adjusting the policy, which could mean higher premiums
- Taking legal action, which could result in fraud charges.
What to do if you think you’ve accidentally lied on a life insurance application through Ladder
We get that mistakes happen. If you think you’ve inadvertently lied or left something out of a life insurance application through Ladder, you’ll want to reach out to our team of licensed agents to assist you. They’ll be able to halt the application process and get your correct information over to our underwriting team. If you have questions while filling out the application, our chat option is a great way to get answers in real-time during our business hours.
How to fill out a life insurance application with Ladder
Ladder’s digital application includes a powerful underwriting machine that can get most applicants a decision almost instantly, but you must be honest in your application so that we can get an accurate picture of your health and personal activities. The application asks a series of medical and administrative questions to help underwriting determine your insurability. We ask questions such as your age, tobacco use, medical diagnoses, prescription medications, and family medical history, among others.
You should read through every question carefully, and if you are unclear on how to answer them, you can read through our Frequently Asked Questions to see common topics. If you still need more help, you can reach out to our team of licensed agents through phone, email, or chat.
Takeaways
Life insurance is a way to protect your beneficiaries in the unlikely event of your death. It can be a powerful tool to do things like pay off a mortgage, send a kid to college, or just keep the monthly bills from becoming overwhelming. Life insurance companies trust applicants but also need to verify things such as identity, criminal records, driving history, medical records, and more. The process is inherently based on mutual trust — customers must trust the insurer to be there to take care of their beneficiaries if they die, and insurance companies must trust that customers haven’t misrepresented themselves on an application. The risks of lying on an insurance application, such as having a policy rescinded or a death benefit claim denied, far outweigh the benefits of getting a lower monthly premium. To qualify for coverage, you’ll need to be honest.
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