I lied during my Insurance Policy application. Should I come clean now?

Posted 19 July, 2018 by Clearly
in Pitfalls to Avoid

The temptation to be less than truthful…

is always strong.

Don’t we know it. So do certain US presidents (some say all of them!)


“I did not have sexual relations with that woman”


Yet being untruthful isn’t always exclusive to US presidents. Ordinary people do it all the time too, because the short term gains can be all too enticing.


Especially so in Life Insurance.


Everyone knows that you will generally pay more for being a smoker, for having existing health conditions, or for having too high/low a BMI. (Things like gender and age play a big role too, but those generally cannot be fudged)

Given that it is usually your word and declaration on a piece of paper, it can be so tempting to self justify certain untruths:


Non smoker
(I plan to quit the day after, no big deal)

No existing health conditions
(That was a long time ago, diagnosed in a small clinic. No problems since then)

A “modest” body weight
(I will starve for the next 5 days, easy)


These are by far no means the ONLY pieces of information that can be fudged on a policy application, but certainly the most relatable.


Yet the consequences can be far reaching


Like it was for our good friend Bill “still acquitted in the end” Clinton – he suffered the ignominy of being the 2nd US President to be impeached.

We may not be overly concerned about what happens to an office holder in another time zone, but we do care very much about our own policies, especially when we are counting on them to pay out if something happens to us.


Here is the problem with being flexible with the truth on the application form. Most of the information inside is considered “material information”, meaning that the insurer has to depend on that for accessing your risk – and conditions for accepting your application.

Failure to properly disclose can lead to a simple outright rejection of all claims – the very outcome that you want to avoid when something happens.


>> The tick that cost me $32,000 – A cautionary tale of disclosure <<


Should you come clean?



You purchase Insurance to protect yourself when you need it most, so don’t risk a claims rejection just for convenience or to save some money.


How to resubmit your Insurance policy application?


Regardless of how long the policy has been around (it could have been around for years, or it could still be in the process of being accepted), the best practice is to come clean pronto.

Contact your adviser, or the insurer, and ask to resubmit the relevant health declaration forms specific to your policy again.

You might be asked for medical reports, or be asked to undergo a medical examination, so be prepared for those.

Then we wait.


Possible outcomes


After re-assessing your case, there are 2 things in general that might happen:

1) The policy is accepted/resumes coverage, but with changes in premium or with exclusions in cover (or both). Depending on the type of policy you have, the insurer may ask you to “backpay” the premiums in the previous years.

2) The policy is rejected or declared void – with full premium refunds to you, without interest. (The contract was broken when the truth was not fully declared, so everything is “reset’ back to its original state)


Key Learnings


It always pays to be truthful. Mum was right all along: Honesty is the best policy.


… and nothing but the truth


Buy your insurance cover as soon as you can, while you know you are healthy to avoid all this melodrama altogether.

Life doesn’t have to be so complicated after all.


Subject Matter expert


This article was made possible by the kind consultation given by Zest Chia, who has been regularly featured on our posts.

He serves 1080 clients and manages over $2 million dollars of investments for them. His aspiration is to empower people to make wise financial decisions that impact not only themselves, but for generations to come.

Here are some of his past contributions:

I was warded in one of Singapore’s most expensive hospitals. Thank goodness everything was paid for

3 Rules to master your finances like a Jedi

What Colour is your Retirement? [Self Check]


www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.

We are strong proponents about being truthful about 99.9% of the time, until someone asks if we want another scoop of ice-cream. We grudgingly decline with a dull ache in our hearts.

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