Lying on Life Insurance – What Happens?
Misinformation, white lies, little porkies, telling fibs, being economical with the truth, non-disclosure.
Whatever you call it, lying is lying and you definitely shouldn’t be doing it if you are applying for a life insurance policy.
But why?
Surely a little lie isn’t a bad thing, right?
Wrong.
Because lying on your life insurance policy could leave you high and dry when you or your family needs help the most.
It is a biggie, so wait for it…
Lying on your life insurance policy = No payout.
Non-Disclosure on Mortgage Protection or Life Insurance
Lying on your mortgage protection proposal form or purposely withholding information could lead to your insurer refusing to payout upon your untimely demise.
Meaning you could leave your precious family in the shit with no way of financially protecting themselves.
All those years of paying a monthly premium will have been wasted.
You would be better off saving up that cash in a disappointing savings account than throwing it at a life insurance policy you have told fibs to get.
But If I Tell The Truth, I Won’t Get A Policy
Look, it’s a broker’s job, it’s my job to get you a life insurance policy and it’s rare for someone to be declined.
Postponements are more common and these are more a bump in the road than an outright no.
On that very rare occasion that someone is refused, it’s upsetting especially if it’s because of something outside their control like a congenital heart defect.
If every broker in town has tried to get you a life insurance policy and every single life insurance provider has shut their doors to you like the innkeepers on Christmas Eve, I really am sorry.
It sucks and it’s rare but if it happens to you, and you need it for a mortgage, you can always apply for a waiver.
But the Bank Refused to Give Me a Waiver
OK, I feel your pain.
You’ve been honest, told the truth on your application form and were up front in asking for a waiver and the bank still said no.
Is it any wonder why you are tempted to lie on your application form just to get a roof over your head?
What happens to my Mortgage if I Lie about my Health?
Look I get it, you want to buy a house, you need a mortgage.
To get a mortgage many mortgage providers want you to have life insurance or a mortgage protection policy.
And if certain circumstances in your life are stopping you from being able to obtain this it can seem the only solution is to lie.
Your only goal is to get a mortgage so it doesn’t seem as big a deal.
But lying on your mortgage protection application to get a mortgage could have dire consequences for your family.
A life insurance policy or mortgage protection policy is there to protect you, your family, and the bank in the unfortunate event that you meet your maker far sooner than anyone expected.
It’s a way of ensuring that your mortgage gets paid either way, that the bank gets their money, and that your home stays in the family.
By lying on your life insurance policy you are risking your family ending up without a home.
When you pop your clogs your mortgage won’t die with you. If your family can’t make the repayments, eventually the bank will turf them out onto the street.
A Tiny Lie About my Weight Can’t Hurt!
Maybe, maybe not. You could tell a little fib and end up getting your policy paid out.
Then again, it might not be.
And if it’s really just a tiny, unassuming lie, your best to let your broker know and let them decide whether it’s worth disclosing. They are the professionals after all.
But let’s walk through what could happen in the event of a claim.
Johnny has a BMI of 49. He knows he can’t get mortgage protection but intends to lose weight in the future so he completes his application using his expected weight in the future.
Johnny gets cover based on a BMI of 39. All grand, mortgage drawn-down, everyone is happy.
10 years later, Johnny has lost a lot of weight and is down to a BMI of 35 but passes away after a massive heart attack. His bank makes a claim on his policy.
The insurer requests a medical report from his GP that confirms Johnny’s BMI at 55 around the time he took out his policy. The insurer refuses to pay the claim. Unfortunately, Johnny’s wife can’t keep up the mortgage repayments and loses the family home.
Most life insurance policies are paid out every year.
Last year New Ireland paid 99.84% of death claims. There were only 2 claims declined for death and 1,245 paid. All were due to non-disclosure.
Non-disclosure/misinformation/untruthfulness = Lying.
There’s no sugar coating it really.
But Barry The Broker Said Lying Isn’t A Big Deal
Barry’s a bollox and gives our industry a bad name.
If you trust a fella who says lying on a life insurance policy is ‘no big deal’ then I wish you and your family the best of luck.
But I can tell you he doesn’t have your best interest at heart.
It’s no secret us brokers get a little bit of commission every time we get you to sign on the dotted line of an insurance policy.
Brokers like Barry love the commission. In fact, it’s the only reason Barry and his cohorts do this job until something better comes along.
Thankfully the Barrys of this world are few and far between.
The vast majority of brokers do this job because they enjoy helping people, not to line their pockets by fleecing you of your hard-earned cash.
We want you to get your policy the right way so you and your family are protected.
We are PROTECTION brokers.
But hey, if Barry is the more appealing option, you do you, but believe me when I say that nagging doubt is always going to be there, lingering and festering in the back of your mind.
We have some clients who previously lied just to get a mortgage and they have admitted the relief was palpable when we got them a real replacement policy that would actually pay out.
What If I Can’t Get A Life Insurance Policy?
The likelihood of you being declined during your life insurance policy application is very low.
Nearly everyone can access life insurance or mortgage protection, even if their health is pretty bad.
In those situations, you may have to pay a higher premium every month for the peace of mind of that kind of protection.
For those who genuinely can’t get a life insurance policy without telling a few porkies, well, I’m really sorry.
I know it won’t be the news or advice you’re looking for but lying on a life insurance policy is no better than having no life insurance policy at all.
The only difference is that with one, you are paying money for something that won’t work out in the end anyway.
Like I said before if you can’t get approved look at a high-yield savings account or maybe even start investing as a backup death plan.
That being said, if you do go this route talk to a qualified financial advisor who can advise you on how to invest etc.
Because I have no idea how that stuff works!
Over To You…
So, if you haven’t got the hint yet.
Do not lie on your life insurance policy application.
I know this whole life insurance game can be overwhelming and at times a little confusing.
If this blog has set off an alarm bell and you want to talk it through, schedule a callback here
It’s actually really likely that that very thing you are considering lying about isn’t as big of a deal as you first thought.
Thanks for reading
Nick
PS: We hit 1400 Reviews today. Round numbers make me happy.
