Life insurance is meant to provide people with peace of mind. Yet many families discover, often at the worst possible time, that their claims are denied. One of the most common reasons lies not in the claim itself, but in the original application. Insurers scrutinize applications for inconsistencies, omissions, and red flags. Understanding these pitfalls is critical to protecting your family’s future.
Insurers are not looking for reasons to pay. They are looking for reasons to deny. By learning the ten most common red flags in insurance applications, beneficiaries can anticipate problems, correct errors, and fight back when denials occur.
Incomplete Medical History
Applications ask detailed questions about medical history. Leaving out information, even unintentionally, can trigger a denial years later. Insurers may argue that omissions were “material misrepresentations.” For example, if an applicant forgets to mention a past diagnosis of high blood pressure, the insurer may later claim that the omission was significant enough to void the policy. Even minor conditions, like a routine surgery or a prescription for seasonal allergies, can be used against families. The safest approach is full disclosure, even when the condition seems insignificant. Families should think of the application as a sworn statement rather than a casual questionnaire.
Misstated Lifestyle Habits
Questions about smoking, alcohol use, or recreational drug use are treated as critical risk factors. Applicants sometimes minimize or omit these habits, believing they are harmless. When claims are filed, insurers often investigate medical records and pharmacy histories. If discrepancies are found, coverage may be denied entirely. For instance, if someone reports being a non‑smoker but medical records show nicotine prescriptions or doctor notes about smoking cessation, the insurer may argue that the policy was obtained under false pretenses. Honesty about lifestyle habits prevents insurers from exploiting omissions later and ensures that families are not blindsided by denials years down the road.
Employment and Income Misstatements
Applications often require details about employment, income, and financial obligations. Insurers use this information to assess risk and determine coverage amounts. Misstatements, whether intentional or accidental, can lead to denial. Overstating income to qualify for higher coverage may seem harmless, but if discovered, it can void the policy. For example, an applicant who claims to earn $100,000 annually when their tax returns show $70,000 may face a denial if the insurer argues that the misstatement was material. Accuracy is essential, because insurers often verify income through tax records or employer statements.
Ignoring Pre‑Existing Conditions
Applicants sometimes believe that omitting pre‑existing conditions will help them secure coverage. In reality, insurers often review medical records after a claim is filed. If a condition was not disclosed, they may deny benefits. Pre‑existing conditions are not always disqualifying, but failing to disclose them almost always is. For example, someone who fails to mention a history of diabetes may later face a denial when the insurer discovers the omission during claim review. Transparency strengthens the claim and prevents insurers from arguing that the policy was obtained under false pretenses.
Inconsistent Answers Across Forms
Insurance applications often involve multiple forms: initial applications, medical questionnaires, and follow‑up documents. Inconsistencies between these forms are red flags. Listing “no history of heart disease” on one form but mentioning “minor chest pain” on another can trigger suspicion. Insurers may argue that inconsistencies amount to misrepresentation. Even small differences, such as reporting different dates for a hospital visit, can be magnified into grounds for denial. Families should review all forms carefully and ensure consistency across every document submitted. A single contradiction can give insurers the excuse they need to deny a claim.
Failure to Update Information
Life changes quickly. New jobs, new health conditions, new habits. Applicants sometimes fail to update insurers when these changes occur. Insurers may later argue that the policy was based on outdated or inaccurate information. For example, developing diabetes after applying but before approval must be disclosed. Silence can be treated as misrepresentation. Families should treat updates as part of their responsibility to keep the policy valid. If circumstances change, notifying the insurer immediately can prevent disputes later.
Omitting Medications
Applications often ask about prescriptions. Families sometimes omit medications, believing they are insignificant. Insurers treat omissions as evidence of dishonesty. Even common medications for blood pressure, cholesterol, or anxiety can be relevant. For example, failing to list a prescription for antidepressants may later be used to argue that the applicant concealed a mental health condition. Listing all medications prevents insurers from exploiting omissions and ensures that the application reflects the applicant’s true health profile.
Contestability Period Risks
Most policies include a contestability period, typically two years. During this time, insurers can investigate applications and deny claims for misstatements. Families often discover denials during this period. Insurers use the contestability period aggressively, magnifying even minor errors into grounds for denial. For example, if an applicant forgets to disclose a minor surgery, the insurer may deny a claim during the contestability period even if the surgery had no impact on the cause of death. Extra care during this period is essential, because insurers have broad authority to challenge claims.
Misrepresentation of Beneficiaries
Applications require clear designation of beneficiaries. Errors or ambiguities can lead to disputes and denials. Listing “children” without specifying names can create confusion. Insurers may deny claims when beneficiary designations are unclear or contested. For example, if an applicant lists “spouse” but later divorces without updating the designation, disputes may arise between the ex‑spouse and current family members. Designating beneficiaries clearly and updating them when circumstances change avoids unnecessary disputes and ensures that benefits are paid to the intended recipients.
Overlooking Policy Riders and Exclusions
Applications often include optional riders and exclusions. Families sometimes overlook these details, assuming they are minor. Insurers use them to deny claims. A suicide exclusion may apply during the first two years. A hazardous occupation rider may exclude coverage for certain jobs. For example, a construction worker who fails to notice an exclusion for dangerous occupations may later face a denial if death occurs on the job. Reading riders and exclusions carefully is critical, because they often contain the very clauses insurers rely on to deny claims.
Lessons for Families
These ten red flags highlight the importance of accuracy, transparency, and vigilance. Families must treat insurance applications as legal documents. Every word matters. Every omission creates risk. Insurers rely on fine print and technicalities. Families must rely on persistence and clarity. By understanding these red flags, beneficiaries can anticipate problems and fight back when denials occur.
Conclusion
Insurance applications are the foundation of coverage. Errors, omissions, and red flags create openings for insurers to deny claims. Families must treat applications with the seriousness they deserve. By understanding the ten most common red flags, beneficiaries can protect themselves, anticipate problems, and fight back when denials occur.
Written & Reviewed by Christian Lassen, Esq., Nationally recognized life insurance lawyer: 25 years experience, hundreds of millions recovered. Quoted in The Wall Street Journal ( May 17, 2025).
Last reviewed: Dec 11, 2025 | Contact 800-330-2274