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Life Insurance Concealment: 5 Things You Shouldn’t Hide

Updated: September 16, 2018

One of the most frustrating things about getting life insurance is the questions you must answer before getting a quote.

There is a temptation to lie during these questions, but fraud by concealment is something insurance companies take very seriously.

Concealment of a material fact by a policyholder is something that can cause the insurance company to terminate a policy.

What is fraudulent concealment? Any time you are failing to disclose accurate information about the questions asked before you get an insurance policy.

Here is a look at some things you should never hide from your life insurance provider.

Life Insurance Concealment: Not Mentioning That You Smoke

Smoking has a tremendous impact on the money you will pay for life insurance. When we take a comparison of policies for smokers and non-smokers, it is not unreasonable to see smokers paying two to four or five times more for their policy than non-smokers.

While you may think you can get away with this lie, especially if you only smoke a few cigarettes a day, you are taking a huge risk.

Why do insurance companies charge so much to insure smokers? Because of the increased risk of that individual dying prematurely. Smoking increases the chance of getting so many life-threatening conditions. To offset against this risk, insurance companies must increase the premiums.

This is why so many people are tempted to lie about the fact that they smoke.

While you may think you can get away with this lie, especially if you only smoke a few cigarettes a day, you are taking a huge risk.

It may take a long time for the insurance company to discover you smoke, but they will find out eventually and they will refuse to honor the policy without any exceptions. It is possible to let years of premium payments go down the drain if you lie about smoking.

Life Insurance Concealment: Not Disclosing Your High-Risk Profession

The job you do on a daily basis will have an impact on the type of life insurance policy you can get. For example, someone who works as a stunt man for a movie or television show is a much higher risk candidate than someone who has a desk job.

Types of professions that can impact your life insurance policy include working as a police officer, fireman, emergency responder and construction worker.

While insurance is available for higher risk candidates, it comes with different premiums and conditions than regular policies. If you get a regular policy, but fail to disclose your high-risk profession, you are running the risk of the policy being null and void.

High-risk professions also mean a higher risk of passing away while at work. If this happens, and you did not disclose the profession to your life insurance provider, they will not honor your death benefit. The insurance company takes these types of lives very seriously.

Types of professions that can impact your life insurance policy include working as a police officer, fireman, emergency responder and construction worker.

Each of these professions comes with different options for life insurance – with most of them stemming from offerings by the relevant employers.

Life Insurance Concealment: Not Disclosing a Serious Health Issue

As we get older, we have a greater chance of picking up a long-term health condition that never goes away. These health issues can also impact the money individuals have to pay for life insurance.

Even if you get away with your lie of omission for the entirety of your life, an insurance company will find out your health condition when you pass away.

An insurance company will offer higher premiums to potential policyholders who have a significant health issue. For example, someone suffering from diabetes may have to pay more for life insurance than a perfectly healthy individual of the same age.

But can you get away with not disclosing a serious health issue? No.

Even if you get away with your lie of omission for the entirety of your life, an insurance company will find out your health condition when you pass away. They will look at your medical records before releasing the death benefit.

If they look at those records and find out you had a health issue before getting the policy, and did not disclose this issue, they could refuse to honor the death benefit. You are taking a huge risk if you do not provide the insurance company with all the right information about your health when getting a policy.

Life Insurance Concealment: Providing Misinformation about Your Hobbies

There is nothing wrong with enjoying hobbies that involve a lot of risk. But you must understand that these hobbies can impact the life insurance policy you hold.

The biggest problem arises if someone passes away while engaging in one of these high risk hobbies.

Any hobby that involves a significant risk of long-term injury or death is considered a dangerous hobby. For example, sky diving is a type of hobby where you are taking a serious risk. If an insurance company finds out you take part in such activities, they are within their rights to cancel your policy.

The biggest problem arises if someone passes away while engaging in one of these high risk hobbies. There is a very good chance the insurance company will NOT honor the death benefit if you die because of a dangerous hobby you voluntarily chose to do.

If you are considering sky diving or engaging in similarly dangerous activates, call your insurance agent and ask them how this impacts the policy. They will walk you through the process of ensuring your policy remains active despite this hobby.

Insurance companies are much easier to handle if you are being honest and upfront with them.

Life Insurance Concealment: Lying About Anything Else

There is never a situation where you should feel comfortable about lying to a life insurance company. The most important thing you can do with regards to your policy is provide honest answers to their questions.

If you are considering lying or omitting details about your situation when getting life insurance, take a moment to consider how these insurance companies operate.

Whether you are lying about your age, habits, profession or marital status, these lies can have a serious impact on your policy in the future.

If you are considering lying or omitting details about your situation when getting life insurance, take a moment to consider how these insurance companies operate.

An insurance company exists to make money. They are not offering you insurance out of the goodness of their heart. If there is any loophole that allows an insurance company to renege on their promise of providing a death benefit, they will take this opportunity.

Lying when getting life insurance is providing the insurance company with a gift-wrapped opportunity to cancel your policy down the road. Someone could have made premium payments for two decades, but if they lied significantly when getting the policy, an insurance company may cancel their insurance.