Life Insurance - Can You Be Too Honest?
Mon, 05/18/2009 - 20:50.
in
I recently applied for life insurance – after not having it for some time, I realized it would be prudent that I get some, especially that I'm approaching the age of 40. Part of the application is a little supplemental health questionnaire they give you. I answered it and then sent it in and then waited …
It had been several weeks and while at the doctors, I casually asked if he'd received anything from the insurance company. I explained that I had applied for insurance, filled out a health form and wondered if they'd sent him anything. His response was unexpected. He said, 'You said THAT on your questionnaire??'
Naturally, I was surprised. Aren't you supposed to be honest when it comes into filling out paperwork relating to life and health insurance? They can pretty much find out anything they want about you. I've actually filled out such questionnaires before and in Canada and the US such information is actually kept on databases. I know here in BC, our medical system keeps vast records which are accessible should the need arise.
I figured, since detailed records are kept on me, and can be easily accessed by insurers, it would be best to say everything about my health background and other activities that would pertain to my health.
But, it begs the question, if it can't be tracked on some database or your doctor doesn't know about it, should you mention it on any insurance application?
I know in my case, I mentioned a few things - and I am NOT saying what they are!;) – that caused my initial application to be delayed. Now, my doctor has to fill in some forms, but I know there is no problem so my application will ultimately be approved, but it's worth thinking about.
What's my take? Well, I believe honest is the best policy. If they approve your application and you've mentioned every bit of 'dirt' on your history, it lowers the chance that they can be denied benefits once you need to collect. And that's a huge issue – if you lie on any insurance application and they find out, you're screwed: they could very easily deny benefits.
I know in my case, I don't smoke but I've had a cigarette or two when I've been drinking, so I applied for smokers' coverage. I just felt it was easier in the end.
I'm being devil's advocate here, and this does NOT reflect me in any way, but what about recreational drug usage? Should you mention this? I'm sure many of us have tried this, but how would they find out? There wouldn't be any medical records and for the most part, your doctor wouldn't know …?
They could deny your initial application based on some of the information you provide so it's important to consider what you say. I'm not saying you should lie and I believe in honesty but you should be careful.
Just something to think about.
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Being Honest
I would agree with you. You will never get in trouble for being honest. I think however that sometimes we (and me included) tend to "bend" the truth to fit the situation. I admire you for being honest about the smoking but I would say what is the intent of the question. If they are looking to see if you have badly damaged lungs from smoking, then is the occasional cigarette really what the insurance people are concerned about.
About the recreational drug use..... I suspect that for the people who use them (I don't), they are probably the type who would NOT mention it on the form.
Yeah, they should have a
Yeah, they should have a line item for those who 'smoke at the bar' because that's definitely a gray area!
Life Insurance
@BobV I guess those questions are designed to weed out the extreme risks. They must expect certain behaviours as 'normal'
@MoneyBeagle I don't recall seeing an item for 'bar smokers' ;) Again, I guess the questions are designed to minimize any risk to the insurance company.
It's better to be honest
It's better to be honest than have any claims denied for fraud.
But on a more serious note.... what the heck does your age have to do with whether or not you need life insurance? Your blog posts on life insurance suggest to me that you really don't understand the purpose of life insurance.
Life Insurance
Honest IS the best policy for sure! Better safe than sorry.
Perhaps, I didn't make myself clear in the posts ... I haven't had life insurance mostly because I have no dependents or major assets. You are correct in saying that age has little to do with it.
When I mentioned my age, particularly the milestone of turning 40, it was because it has been causing me to reflect more on my mortality lately, and hence considering life insurance more and more. I wonder if people sometimes think "I'm young and nothing will happen to me" ... so I don't need that.
Of course, if I had kids, big house or large estate, I would have had insurance much sooner.
you have to tell the truth
You have to tell the truth. You won't be able to get the most affordable life insurance but saving a few dollars is nothing compared to the cost of them invalidating your policy when you are ill. They are doing this more and more in an attempt to save themselves some money.
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