You should never lie on an insurance application – honesty is the best policy. Every life insurance policy has a two year contestability period in which the insurance company has the right to investigate and contest your claim if they have choose. If the company finds proof that you intentionally lied on the application, they may deny the claim altogether, leaving your beneficiaries with nothing. Making an intentional misrepresentation on an insurance application may also be considered insurance fraud.
Insurance companies have many tools at their disposal to make sure that a fair offer is given based on the applicant’s overall risk. They can check your history of prescription drugs, order your medical records, check the Medical Information Bureau (MIB) for any red flags that may exist, and see if you have been declined or rated by other insurance companies in the past. The authorizations you sign on the life insurance application give the company the right to run these type of checks. If you are caught lying to a company, you may also jeopardize your chances of getting an offer from another company too. Most life insurance applications ask if you have ever been declined, postponed, or assigned an additional rating by another company.