Insurance and the honest truth

When it comes to applying for life insurance, disability cover, serious illness cover or salary protection, there is no such thing as a white lie. Your insurer will ask you a number of questions about your health, lifestyle, family history and more – and they’ll use your answers to decide whether you qualify for cover and how much you qualify for, as well as to set your insurance premium. It’s very important that you answer these questions honestly, and that you don’t withhold any relevant information, as what you say (or don’t say) in your application could affect a future claim.
What types of questions can you expect?

Along with your age, gender, profession, income and level of education, your insurer will want know about your health, family history and lifestyle. Questions they’ll ask may include:

• Are you a smoker?
• Do you have any risky hobbies or play any risky sports?
• Do you travel to areas deemed to be high risk?
• Have you ever been treated for illnesses like cancer, diabetes or heart attack?
• Do you have a family history of illness?

Why do people lie in insurance applications?

There are many reasons why people might be tempted to lie, but usually it’s to get cover they may not otherwise qualify for, or to secure lower premiums. The things people often lie about include smoking habits, a pre-existing medical condition or a family history of illness. This is always a bad idea and here’s why…

Honesty is the best policy
In the event of a claim, your insurer will attempt to verify the information you provided in your application. If they discover that you lied or omitted relevant information, they could reject the claim and refuse to pay the benefit, or cancel your policy. And depending on the circumstances, they could even bring charges against you for insurance fraud.
Here’s something to bear in mind: Lying or withholding information could affect a claim, even if the reason for the claim is unrelated. For example, if you lied about being a smoker and end up dying in an accident, your insurance provider is within its rights to refuse to pay the benefit.

The moral of the story? Always opt for the truth, the whole truth and nothing but the truth when applying for insurance cover.

If you’d like to know more about cover from Standard Bank Direct life insurance services, get a quote or request that a customer service agent call you back.

Sources
bankrate.com
einsurance.com
insure.com
View all articles