You’ve done your research, compared quotes, and found the life insurance plan that seems to fit your needs. Then you face that one question: “Are you a smoker?” or “Have you ever had a serious medical condition?” It might be tempting to shade the truth — after all, a lower premium sounds great when doing your life insurance application
But being honest on your life insurance application isn’t just good advice — it’s essential. Misrepresenting your information, even with good intentions, can seriously affect your coverage and your family’s financial protection later.
What is ‘insurance fraud’?
It helps to first understand what insurance fraud means. It’s an intentional deception or dishonesty on the part of either the buyer (insured party) or seller (insurance provider or insurance agent) of an insurance policy, for unjustified financial gain. If the buyer or seller deceives the other party, this will deem the policy that they enter into invalid.
For insurance buyers, one of the most common frauds that you must stay away from is application fraud.
What is ‘application fraud’?
Lying or withholding key information on your life insurance application is called application fraud. It’s a form of insurance fraud where incorrect or incomplete answers are given to lower your perceived risk. Examples include claiming you don’t smoke when you do, hiding past illnesses, or understating high‑risk activities.
Insurance companies take application fraud seriously. Your application becomes part of the legal contract once you sign it, and insurers can and do verify information through medical checks and records.
3 Serious Consequences of Being Dishonest
Lying on your insurance application can land you in big trouble when your secret is out in the open. These are some of the serious consequences of lying on your life insurance application.
1. Your Application Could Be Denied
Even if you think no one will check your answers, insurers have access to powerful verification tools, including medical records and specialist reports you authorize during underwriting. If a discrepancy is uncovered, your application could be rejected completely — meaning you’ll have to reapply or seek coverage elsewhere.
2. You Might Pay Higher Premiums Later
One reason people lie is to get a lower premium — for example, saying they don’t smoke. But if the insurer later discovers the truth, the best‑case outcome may be that you’ll simply be charged a higher premium than you should have been originally. The worst case is that your policy gets invalidated altogether.
3. Death Benefit Could Be Reduced or Denied
Life insurance policies typically have a contestability period — usually around one to two years after the policy starts — during which the insurer can review or investigate the application. If you pass away during that time and the insurer finds out you provided false information, your beneficiaries might receive a reduced payout or even nothing at all. This defeats the purpose of buying coverage in the first place.
Honesty Helps Everyone — Including You
You might wonder: “Does this really happen?” The answer is yes. Insurers routinely verify applications by accessing medical history and records that you’ve agreed to share. If something doesn’t add up, they’re legally allowed to act on it.
Being honest doesn’t just protect your coverage — it also keeps the insurance system fair for all policyholders. Insurance relies on accurate risk assessment, and hiding key risk factors undermines the entire structure.
Legitimate Ways to Manage Premiums
You don’t need to lie to lower your premium. There are ethical ways to manage costs — such as choosing suitable coverage limits, comparing plans, considering co‑payments, or adopting healthier habits — and BJAK’s platform makes it easy to customise policies that fit your budget and needs.
Conclusion
Honesty truly is the best policy when applying for life insurance. Providing accurate and complete information ensures your coverage is valid, protects your family, and keeps your peace of mind intact. Misrepresentation — even a small one — can lead to denied coverage, higher costs later, or loss of death benefits.
If you’re unsure about any question on your application, speak with your adviser or BJAK’s support team — it’s always better to be clear and correct from the start.
