Life insurance companies frequently deny claims by accusing the insured of misrepresentation during the application process. These denials usually arise after a death, when the insurer reviews the application line by line and looks for any answer it can claim was incomplete, inaccurate, or misleading.
While insurers often frame misrepresentation as fraud, many of these cases involve innocent mistakes, misunderstood questions, outdated medical information, or facts the insured did not know at the time. In most jurisdictions, a misrepresentation must be both material and related to the insurer’s risk assessment before it can justify denying a claim.
Below are thirteen examples that show how misrepresentation denials arise and why they are often disputed.
Examples of Misrepresentation Based Claim Denials
1. Physicians Mutual Life Insurance Claim Denied
Issue: The insured stated she had never been diagnosed with cancer.
Insurer’s Argument: She failed to disclose a prior breast cancer diagnosis.
Dispute: Medical records showed she was never informed of the earlier diagnosis.
Why It Was Challenged: Knowledge and intent are central to misrepresentation claims, and undisclosed information must be known to the applicant.
2. NEA Life Insurance Claim Denied
Issue: The insured reported no medical conditions or medications.
Insurer’s Argument: Prescription records showed treatment for anxiety and insomnia.
Dispute: The medications were unrelated to the cause of death and not material to underwriting.
Why It Was Challenged: Not all omissions affect insurability or justify rescission.
3. Military Life Insurance Claim Denied
Issue: The insured stated he had no hazardous hobbies.
Insurer’s Argument: He regularly participated in skydiving.
Dispute: The application did not clearly define what qualified as a hazardous hobby.
Why It Was Challenged: Ambiguous questions are often interpreted in favor of coverage.
4. Texas Service Life Insurance Claim Denied
Issue: The insured reported no criminal or traffic history.
Insurer’s Argument: Past DUI convictions and speeding tickets were discovered.
Dispute: The violations were not material to the cause of death.
Why It Was Challenged: Misrepresentation must be material, not merely inaccurate.
5. Penn Treaty Life Insurance Claim Denied
Issue: The insured listed himself as single with no dependents.
Insurer’s Argument: Records later suggested a prior marriage and children.
Dispute: Marital status did not affect underwriting risk.
Why It Was Challenged: Personal status information is often immaterial to life insurance risk.
6. Summit National Life Insurance Claim Denied
Issue: The insured misstated her age on the application.
Insurer’s Argument: The age discrepancy increased underwriting risk.
Dispute: Premiums were accepted for years without correction.
Why It Was Challenged: Insurers cannot ignore errors until after death, then claim rescission.
7. ALCPA Life Insurance Claim Denied
Issue: The insured denied a family history of heart disease.
Insurer’s Argument: Several relatives had cardiac related deaths.
Dispute: The insured lacked knowledge of extended family medical history.
Why It Was Challenged: Applicants are not required to disclose unknown information.
8. ReliaStar Life Insurance Claim Denied
Issue: The insured denied plans for foreign travel.
Insurer’s Argument: A future trip had been booked before application.
Dispute: Travel plans were tentative and unrelated to underwriting risk.
Why It Was Challenged: Speculative future activity is often not material.
9. Delaware Life Insurance Claim Denied
Issue: The insured denied having life threatening illness.
Insurer’s Argument: Medical records later showed HIV.
Dispute: There was no evidence the insured knew of the diagnosis at application.
Why It Was Challenged: Knowledge and timing are critical in misrepresentation cases.
10. Iowa Farm Life Insurance Claim Denied
Issue: The insured denied substance abuse history.
Insurer’s Argument: Prior treatment records suggested addiction.
Dispute: The insured was in recovery and the records predated the policy.
Why It Was Challenged: Insurers must show ongoing material risk.
11. Western United Life Insurance Claim Denied
Issue: The insured stated she was a U.S. citizen.
Insurer’s Argument: Identity and citizenship were questioned post claim.
Dispute: Citizenship was unrelated to mortality risk.
Why It Was Challenged: Insurers cannot deny claims based on immaterial personal status.
12. Christian Fidelity Life Insurance Claim Denied
Issue: The insured denied owning other life insurance policies.
Insurer’s Argument: Additional policies were discovered.
Dispute: Multiple policies did not increase mortality risk.
Why It Was Challenged: Many applications treat other coverage as informational only.
13. Sagicor Life Insurance Claim Denied
Issue: The insured denied a history of mental illness.
Insurer’s Argument: Prior diagnosis of bipolar disorder was discovered.
Dispute: The diagnosis was remote and untreated at the time of application.
Why It Was Challenged: Insurers must show material connection to underwriting and policy terms.
Why Misrepresentation Denials Are Frequently Disputed
Misrepresentation denials often fail because:
• The insured lacked knowledge of the alleged omission
• The question on the application was unclear
• The information was not material to underwriting
• The insurer accepted premiums despite knowing the facts
• The alleged misrepresentation was unrelated to the cause of death
Most states require insurers to meet a high burden before voiding coverage.
Common Insurer Errors in Misrepresentation Denials
Insurers frequently rely on hindsight medical reviews
Treat minor inaccuracies as intentional deception
Ignore ambiguity in application questions
Fail to show material impact on risk
Attempt rescission after collecting premiums for years
These errors often make denials vulnerable to challenge.
Insurers Commonly Involved in Misrepresentation Disputes
Misrepresentation based denials frequently arise with insurers such as:
• Physicians Mutual
• AIG
• Prudential
• MetLife
• Transamerica
• Protective Life
Each policy and application must be reviewed individually.
Frequently Asked Questions
What qualifies as misrepresentation in life insurance?
It involves incorrect or omitted information that the insurer claims affected its decision to issue the policy.
Does every mistake justify denial?
No. The misstatement must usually be material and relied upon by the insurer.
What if the insured did not know the information was wrong?
Lack of knowledge is a key defense in many cases.
Can insurers rescind policies years later?
Only under limited circumstances, often within contestability periods.
Are misrepresentation denials common?
Yes, but many are reversed when properly challenged.