Orlando Harmon
A life insurance application is a legal document that requires a signature from the applicant (policyholder), the person being insured, and the insurance agent. The signature serves as an attestation that the information provided in the application is true and accurate. The application provides the insurance company with necessary information, such as the insured's age, address, health history, and other factors, to determine if the applicant meets their underwriting rules and the proper premium. The application is the basic source of insurability information and is thoroughly evaluated by the underwriting department. It is important to provide accurate and detailed information in the application to avoid issues with approval or future applications.
| Characteristics | Values |
|---|---|
| Who needs to sign the application? | The applicant (policyholder), the person being insured, and the insurance agent. |
| Who doesn't need to sign the application? | Beneficiaries |
| What happens if you lie on the application? | Lying on a life insurance application is a form of fraud that could land you in legal trouble. Omitting important details may result in the insurer denying or reducing your beneficiaries' death benefit. |
What You'll Learn
Who needs to sign?
A life insurance application requires a signature from the applicant (policyholder), the person being insured, and the insurance agent. In many cases, the policyholder and the insured are the same person, but if you’re taking the policy out on someone else, like a spouse or business partner, you’ll need their signature, too. For children younger than 18, a parent or guardian is required to sign the application. If the application is for a business entity, the application must contain signatures from one or more partners or officers of the company.
Companion Life Insurance: What Vision Benefits Are Covered?
You may want to see also
What happens if you lie?
Lying on a life insurance application can have serious consequences and is considered a form of insurance fraud. While it may be tempting to lie in the hopes of getting a lower rate, it is not a good idea and could land you in legal trouble.
Insurance companies have ways of verifying the information you provide. They can cross-check your answers with health records, public records, and the MIB database, which collects health information from many life and health insurance companies. If they find out you lied, your application will likely be rejected and recorded in the MIB database, affecting any future applications.
If your lie is discovered after your policy goes into effect, it could result in a claim denial or a decreased death benefit. This is known as the contestability period, which typically lasts for two years after the policy starts. During this time, the insurance company may review your policy for false statements or misrepresentations, and if found, they may deny or reduce the death benefit.
Additionally, lying on a life insurance application can impact your future insurability. You may face higher insurance rates or have difficulty finding an insurance company willing to offer you a policy.
It is important to be honest and transparent when applying for life insurance. If you make a mistake or misremember something, it is best to reach out to the insurance company and correct the information.
Life Insurance and Suicide: What's the Verdict?
You may want to see also
What are the consequences of a false signature?
A false signature on a life insurance application is considered insurance fraud and could have serious consequences. These are some of the possible outcomes:
Application Denial or Higher Premiums
If the false signature is discovered during the application process, the insurance company can immediately decline coverage. If the false signature is accidental or relatively minor, the applicant might still be able to get approved for coverage but may have to pay a higher premium.
Coverage Limitations
Even if the application is approved, the policyholder may face coverage limitations based on an accurate representation of their medical history.
Claim Denial or Reduced Death Benefit
Many life insurance providers apply a contestability period during which they may review the policy for false statements or misrepresentations. If the insured passes away during this time and the insurer discovers a false signature on the initial application, it could result in a claim denial or a decreased death benefit.
Criminal Charges
Intentional fraud or forgery may result in criminal charges, which could potentially lead to jail time.
Increased Insurance Costs for Others
Insurance fraud has financial repercussions for everyone. According to the FBI, insurance fraud costs the average U.S. family between $400 and $700 per year in premium increases.
Dave Ramsey's Whole Life Insurance: What's the Deal?
You may want to see also
What does the application contain?
A life insurance application is a legal document that requires a signature from the applicant (policyholder), the person being insured, and the insurance agent. The application provides the insurance company with necessary information to determine if the applicant meets their underwriting rules and the proper premium.
A typical life insurance application is divided into three sections. The first section contains basic personal information, including:
- Name
- Address
- Age
- Height
- Weight
- Sex
- Occupation
- Earnings
The second section focuses on health and lifestyle, including:
- Medical history
- Hospitalizations
- Medications
- Mental health
- Lifestyle habits (e.g. smoking, drinking, exercise)
- Family health history
The third section covers financial information, including:
- Annual income and net worth
- Risky hobbies, such as rock climbing or skydiving
- Criminal convictions, particularly moving violations
- Premium payment preferences
- Beneficiary information, including their name, date of birth, relationship, and contact information
Additionally, the application may require information about any existing life insurance policies and the applicant's ability to afford multiple policies.
Geico's Whole Life Insurance: What You Need to Know
You may want to see also
What does the insurance company do with the application?
Once the life insurance application is submitted, the insurance company evaluates the applicant's risk of death and assigns a cost to the policy accordingly. The application is the basic source of information for the insurance company to determine whether to issue an insurance policy, and if so, in what classification and at what premium rate.
The insurance company will verify the information provided in the application through external sources, including the applicant's financial information, legal and criminal background, existing insurance policies, financial obligations, and beneficiary information. The application provides the insurance company with necessary information regarding the applicant's age, address, health history, and other factors.
The application will also include a series of questions on the applicant's name, address, age, height, weight, sex, occupation, earnings, beneficiary, insurance history, and medical history. The medical portion of the application is one of the most important sections, asking for detailed information about the applicant's health, health history, and family medical history.
The insurance company may also require a medical exam as part of the application process. The exam is usually conducted by a licensed medical professional and includes a review of the applicant's health history, physical measurements, and blood and urine samples.
After the application and medical exam (if required) have been reviewed, the insurance company will either approve or deny the request to purchase coverage. This process can take days or weeks, depending on the completeness of the application, the receipt of lab results, and any additional information requested by the company.
Chlamydia and Life Insurance: Does It Affect Your Premiums?
You may want to see also
Frequently asked questions
A life insurance application requires a signature from the applicant (policyholder), the person being insured and the insurance agent. If you’re taking the policy out on someone else, like a spouse or business partner, you’ll need their signature, too. For children younger than 18, a parent or guardian is required to sign the application.
Lying on a life insurance application is a form of fraud that could land you in legal trouble. Omitting important details may result in insurers denying or reducing your beneficiaries' death benefit if you die within the two-year contestability period.
The application is a legal document and your signature attests that the information provided is true and accurate. Without a signature, the application is incomplete and will not be processed.
