Before you take out any life insurance, the company will ask you a series of questions about your medical history and current health. You may be asked about the medications you take, any diseases you have or run in your family, and any medical tests you have taken or are waiting on. The insurance company then uses the answers to these questions to determine what rate you will be given for your policy. A material misrepresentation is any lie, omission, or concealment of any facts that would affect your policy. For example, if you fail to disclose a disease that runs in your family as a way to make the insurance company see you as less of a risk, therefore getting you more coverage or a lower premium.

Even in a situation where you genuinely believed you had disclosed all the relevant information but left something out by mistake, insurance companies may claim material misrepresentation. The questions the insurance companies ask can often confuse applicants, as it is not always clear how they categorize or define certain diseases.

What Are Some Material Misrepresentation Examples?

There are four documents where material misrepresentation can potentially happen:

• Your life insurance application form
• Your life insurance application for reinstatement
• Your life insurance policy amendment
• Your life insurance application for late enrollment.

Pay extra attention when filling out any of these forms for the common kinds of material misrepresentation, such as:

• Inaccurate or misrepresented criminal, financial, or employment background information
• Inaccurate height and weight
• Missing information on relevant doctors visits or medical testing
• Inaccurate age
• Not disclosing the medication you take
• Failure to mention past or present substance or alcohol usage
• Failure to disclose medical diagnoses or chronic illnesses
• Failure to mention extreme or dangerous hobbies
• Inaccurate immigration status
• Failure to disclose the fact that you have other insurance policies
• Inaccurate or incomplete answers on the application you insurance agent gives you

Many of the examples above can come about by accident as opposed to intentionally, but an insurance company will still claim that you are to blame and intended to commit fraud. Because of this, you should be very careful with how you approach your life insurance documents and answers and talk to a life insurance lawyer for any extra help you need.

What Happens If An Insurance Company Claims There Is Material Misrepresentation?

If a policy was issued to someone based on incorrect information, an insurance company has the right to cancel a life insurance policy. The specifics of how much insurance companies are allowed to claim material misrepresentation to avoid liability are determined on a state-to-state basis. The general rule is that in order to claim material misrepresentation, there must be both materiality and intent.

• Materiality. In most states, in order for your insurance company to void or deny a policy claim based on material misrepresentation, the misrepresentation has to be material enough. In other words, the insurance company has to be able to say that had they known the correct information about you; they would not have issued you a policy, at least not at the low premium that the misrepresentation allowed. This means that if you, for example, forgot to inform the insurance company about a surgery you had previously undergone, but knowing that information would not have changed anything about the insurance company’s decision-making, they cannot then claim material misrepresentation.
• Intent. Like with materiality, some states will also require an insurance company to prove that the policyholder made an intentional choice to misrepresent their information, as opposed to an honest mistake.

Because of the need for the above to prove material misrepresentation, just having some incorrect or misremembered information will not (depending on the state) be enough to keep you from a life insurance payout. Even so, in order to have your best chance at collecting your money from the insurance companies, your best bet is to contact and speak with a life insurance attorney. They will be able to guide you through the process in as hassle-free a way as possible.

How Can An Insurance Lawyer Help Me?

Whether you are at the beginning of the life insurance process or are already at a point where your company is claiming material misrepresentation, speaking to a life insurance lawyer is in your best self-interest. If, for example, it was not you but the insurance company itself that is responsible for misrepresenting your information, an experienced life insurance lawyer can help you hold them liable.

McKennon law group offers free, no-commitment consultations to any California resident who wants to collect their payout and hold their insurance company responsible. With the experienced team of McKennon lawyers behind you, life insurance companies will think twice about attempting to deny you your rightful returns.