Liar, Liar

Do you swear to tell the truth, the whole truth and nothing but the truth?

When it comes to life insurance, you should. Lying about or forgetting to inform your insurance company about any conditions you have may result in catastrophe. During the first 2 years of a policy, the insurance company has the right to contest a claim if they find fraud.  If you didn’t “tell all” then the insurance company does not have to pay out the death benefit; they only have to refund your premium.  Here is a true story.

Person A bought a life insurance policy, with his wife as the primary beneficiary. The face amount was a half million dollars. When Person A passed away 18 months later, his insurance company found out that he had suffered from schizophrenia and had been hospitalized several times for this condition. He had not informed them or his agent. This is considered fraud, and the wife was lucky when she received $30,000 instead of zilch.

The moral of this story? Be truthful. No matter how embarrassing or uncomfortable revealing who you are may be, it is never worth the risk of losing your family’s security.