Honesty is always the best policy
Telling a little white lie during your insurance assessment can’t really be the end of the world, can it? After all, how is an insurance company ever going to find out that you’re a secret smoker or that you suffer from a pre-existing condition if you don’t tell them?
Let’s be honest, the truth has a funny way of coming out in the end – and there’s always the reality of medical records which can support or deny your so-called picture of health and payslips which can verify your earnings. The fact is, if you’re ever caught fibbing, you could end up potentially losing the cover you took out – and the consequences for you and your family could be disastrous.
When you apply for cover, an insurer will look at several factors, including your age, gender, income, education and health status in order to determine both the cover they will offer you and your monthly premium. Obviously, the healthier you are the less of a risk you are and this means you could end up paying a lower premium. Omitting certain medical information can also mean that you avoid exclusions on your cover for things relating to previous medical issues. This is why some applicants are tempted to exclude a family history of cancer or heart disease and other pre-existing or genetic conditions, including high blood pressure and diabetes. But, they’re in for a surprise when they need to claim.
When a claim is submitted, your insurer will investigate your medical history to determine whether or not you’ve lied during the application process. In the case of salary protection, the insurer will request information from your previous employer and ask you for payslips and bank statements to verify your earnings.
Should it come to light that you have misrepresented the truth; your insurer has a right to deny your claim. And in the case of life insurance specifically, the claim can be denied regardless of whether the false information had anything to do with your death. In other words, if you lied about being a smoker, but end up dying in a car accident, your insurance company is within its rights to withhold payment of the death benefit to your nominated beneficiaries. What’s more, even if any false information goes undetected during the time your claim is being validated, insurance fraud can be investigated at any point during your lifetime, whether you’ve submitted a claim or not. So make sure you keep everything above board from the get-go.
Depending on the situation, your insurer can implement any of the following courses of action:
- Reject your application for cover
- Increase your monthly payments
- Cancel your policy
- Bring charges against you for insurance fraud
- Refuse to pay out any claims
All of these options are clearly best avoided, proving once again that honesty really is the best policy. So take note and make sure you share everything next time you apply for cover.
If you’re keen to find out more about no-nonsense insurance from FRANK.NET, let us call you back or get a quote.