Honesty is the best and only policy
- Have you ever been convicted of a felony?
- Have you ever used tobacco?
- Do you have HIV or AIDS?
- Are you on disability?
- Are you a pilot?
You might recognize some of these questions from any life insurance application you’ve ever filled out. Insurers ask such questions to find out the risk you pose to their bottom line, in the form of insurance claims — and to determine your monthly premium.
For example, a 60-year-old airline pilot with a family history of cancer and a 25-year-old fitness instructor with a clean bill of health pose different risks to an insurer. There are other factors involved, and not all insurers think alike, but you can probably guess who would receive the policy with a lower monthly premium payment.
So, if you’re 60-year-old pilot with a cancer risk, you might be tempted to tell a little white lie in response to questions about your health or hazardous occupation on your life insurance application.
A veteran Asurea agent says, “Do the right thing!” because the consequences of lying on your life insurance application is the risk of no death claim being paid, and ultimately, your loved ones will suffer.
You could also be blocked from obtaining an insurance policy ever again. And, yes, insurance companies swap information about you, including your tendency to fib.
The first thing an insurance company will do when you apply for a life insurance policy is pull a report called an MIB — that’s Medical Information Bureau. Think of an MIB as a credit report for your health.
The report’s coded information shows insurers, in concert with other resources, details such as what illnesses you may have, if you’re on any medications, and even which medications you may have picked up from a pharmacy for someone else, which is a scam.
They see everything. On top of that, the insurance company can request your DMV records and your actual credit report to search for DUIs and determine your income level. And they can do this whenever they feel like it, with ease.
They can go a step further. As a matter of course, they can order a medical exam during the application process, using third-party paramedical examiners. The “parameds” will come to your home or workplace to check your height, weight and blood pressure. They will also take blood and urine samples, and test a strand of your hair for signs of drug use.
Basically, insurance companies can gain access to any information they deem necessary to make an informed choice about how, or if, to cover you. We won’t lie, either. We admit the questions on a life insurance application are intrusive. And we know you may have wondered to yourself, “Why do they need to know all this about me, anyway?”
That “nosiness” is our way of deciding how best to protect you and your loved ones from financial disaster should the unthinkable happen to you in the future.
And trying to figure out what future risks you pose to yourself, and to insurers, is a game of probabilities.
Game of probabilities
Our Asurea team doesn’t want you to lie on your insurance application because we know how steep the consequences can be. Lying (or scamming) on an application can result in being blacklisted, denied a claim or having your premium increased or canceled.
Just think: You’re a fairly healthy 37-year-old woman who spends her weekends climbing rocky mountains. Logically, an insurer is thinking that your climbing rope could one day snap, leaving you injured or dead. And if your ropes do one day fail you, you’ll want to be able to file a claim to cover any medical expenses for your injuries. Or, you’ll want your family to have the money they need to pay for your funeral, burial and any outstanding bills.
You and your loved ones won’t be able to do any of these important things, if you lied about your hobby in the first place. Don’t think it’s that serious? Check out these comments on Summit Post by climbers who’ve had to claw their way over the rocky terrain of gaining a policy. Their risky hobby alone waved red flags at insurers, no lies needed. Although some did report finding higher-cost policies.
Legally speaking, an insurance company has two years to catch a lie before the window to take action is slammed shut.
Our best advice: Channel your inner George Washington and do not tell a lie when you apply. You will only be hurting yourself and your loved ones if you do. Simply angling for the cheapest premium misses the point of why you want the insurance in the first place. If your lifestyle involves extreme rock climbing or flying vintage puddle jumpers, or if a number of people over 60 in your family have had cancer, then a lower premium won’t cover all of your risks if something should happen to you.
Digging for truth
By now, you should know that an insurance company behaves very much like an excited team of archeologists. Whatever you’ve buried deep in the earth, they are more than happy to dig up using their compass, trowel and backhoe.
Any lies they uncover are carefully stored in their MIB database for all other archeologists (insurance companies) to see. If they don’t find any lies, they are of course legally obligated to pay your claim.
When interviewed, one Asurea agent stated, “We do what we do for the clients, but we also have to consider the company’s best interests.”
Keep in mind, even after you die, the insurer can reduce or cancel your death benefit if your autopsy report reveals a hidden illness or injury. And your beneficiaries, most likely the loved ones you were trying to protect, might not see a dime. The moral of this story is: Don’t lie.
The Asurea promise
If you’re daunted by the thought of shopping around for a policy that will take you as you are, health issues, high risk jobs, and more – don’t be. With ties to more than 40 insurance carriers across the nation, our Asurea Agents will do the work for you!
If you’re a hardworking pilot with a cancer risk, a fitness instructor in top shape, or an adrenaline-seeking mountaineer, we promise to help you find a policy that fits your unique lifestyle and budget. So, before you shop for an insurance policy, adopt an honesty policy.