Misrepresentations on Life Insurance Applications: Why They Lead to Denied Claims
Purchasing life insurance is a meaningful way to protect your family’s future, but the process comes with serious legal obligations. What many people don’t realize is that even small misstatements on the application can come back to haunt their loved ones later. When an insurer reviews a claim—especially during the contestability period—they are looking for any discrepancies between the information provided on the application and what later emerges through medical records, death investigations, or background checks. If they find inconsistencies, they may attempt to rescind the policy and deny the claim entirely. The result? Grieving families are left without the financial support they were promised. Understanding how misrepresentations are used by insurers—and how to avoid or fight back against them—is critical.
Smoking and Life Insurance: One of the Most Common Grounds for Denial
Tobacco use is one of the most frequently misrepresented details on life insurance applications. Many applicants mark “non-smoker” hoping to secure a lower premium, believing that occasional or past use won’t be detected. But life insurers often conduct post-claim investigations using medical records, prescription histories, and even autopsy reports. If nicotine use is uncovered—even through vaping, cigars, or nicotine patches—the insurer may claim that the applicant lied and deny the claim. Even if smoking wasn’t the cause of death, the misrepresentation itself can void the contract. Most insurers define “non-smoker” status as no tobacco or nicotine use for at least one to five years. It’s always better to be honest. Paying slightly higher premiums is far preferable to leaving your family with nothing.
Criminal History: Full Disclosure Is Critical
Some applicants try to downplay or omit past criminal charges, assuming that minor offenses won’t matter or that older convictions are irrelevant. This is a costly mistake. Insurance companies routinely run background checks before issuing policies—and they revisit this information if a claim is filed during the contestability period. Felonies, DUIs, and even multiple traffic violations may not disqualify you from coverage, but lying about them almost certainly will. If a policy is rescinded due to criminal history misrepresentation, your family could lose everything, even after years of paid premiums. Always answer honestly, and if you're unsure how your history will affect your application, consult a broker or attorney who understands underwriting guidelines across multiple carriers.
Health Conditions and Application Accuracy
Failure to disclose a known health condition—whether it’s diabetes, hypertension, cancer, or another chronic illness—is one of the most common reasons insurers deny claims. During underwriting, insurers typically request access to your medical records and prescription history. If these records later reveal that a condition was present but not disclosed, the insurer may argue that the policy was issued under false pretenses. This can lead to rescission of the policy, even if the condition was unrelated to the cause of death. It's not just outright lies that trigger denials; vague or incomplete answers can also be used as justification. If you're unsure whether something is relevant, disclose it anyway. It may increase your premiums slightly, but it also ensures your policy is enforceable.
Mental Health Disclosures: Why They Matter
Mental health remains a sensitive topic, but it’s one that life insurance companies take seriously. Failing to disclose treatment for depression, anxiety, bipolar disorder, or past suicide attempts can have serious consequences. Many people fear being denied coverage if they reveal this information, but the truth is that insurers increasingly offer policies to individuals managing mental health conditions—especially if treatment is ongoing and effective. The greater risk comes from concealment. If suicide or self-harm is a factor in the insured’s death, and the insurer finds evidence of undisclosed mental illness, it will almost certainly use that as grounds for denial. Insurers are far more forgiving of disclosed conditions than of perceived deception.
The Contestability Period: A Window of Vulnerability
Most life insurance policies include a two-year contestability clause. This means that if the insured dies within the first two years of the policy, the insurer has the legal right to review the original application and rescind the policy if they find material misstatements. After the contestability period expires, claims can only be denied for intentional fraud—a much higher legal standard. Unfortunately, many claims are denied during this early period based on aggressive interpretations of what counts as a “material misrepresentation.” Even innocent oversights are sometimes used as justification. That’s why it’s crucial to be accurate and thorough when applying, and to seek legal help immediately if a denial occurs during this window.
FAQ: Misrepresentations and Denied Life Insurance Claims
What is a material misrepresentation in life insurance?
It’s a false or misleading statement made on the insurance application that affects the insurer’s decision to approve coverage. Even unintentional misstatements can void a policy during the contestability period.
Can insurers deny a claim for smoking if the insured quit years ago?
Yes, depending on how recently the insured quit. Most insurers require you to be nicotine-free for at least one to five years to be considered a non-smoker.
Do life insurance companies check criminal history?
Yes. They often perform background checks during underwriting and again if a claim is filed. Failing to disclose criminal history can lead to denial.
What if the undisclosed condition didn’t cause the death?
The insurer can still deny the claim if the condition was material to the policy’s issuance. The cause of death does not always have to be related to the omission.
How long is the contestability period?
It’s typically two years from the policy’s effective date. During this time, insurers can review the application and rescind the policy for misrepresentations.
Can mental health issues affect my eligibility for life insurance?
They can, but disclosure is better than concealment. Many applicants with mental health conditions can still get coverage—denials usually happen due to non-disclosure.
Is an honest mistake considered fraud?
Not necessarily. After the contestability period ends, insurers must prove that any misstatement was intentionally fraudulent to deny a claim.
How can a life insurance lawyer help with a denied claim?
They can challenge the insurer’s reasoning, obtain the full policy file, file appeals, and pursue litigation if necessary. Legal pressure often leads to claim reversal.
Can a claim be reinstated after a denial?
Yes. Many claims are paid after an appeal or legal challenge—especially if the denial was based on a minor or irrelevant misstatement.
What should I do if I think the denial was unfair?
Contact a life insurance attorney immediately. Don’t respond to the insurer on your own. An attorney can assess your case and protect your right to the benefits.