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Honesty Key in Life Insurance

hands with stethosWhen you fill out an application for life insurance coverage, you may be tempted to hide some facts or tell a few white lies. After all, you don’t want to be turned down or be forced to pay exorbitant premiums. These tactics may save you short-term but could come back to haunt your loved ones. Honesty is key in life insurance applications.

Joan found this out the hard way. She and her husband had been married thirty years when he decided to take out a $200,000 term life insurance policy. Joan didn’t know, however, that he had also been diagnosed with heart disease.

The insurance company didn’t know either because her husband didn’t disclose this information. When her husband died, he assumed the payout from the policy would provide for Joan financially until she could get back on her feet. Sadly, he didn’t know about that almost all insurance policies include a contestability period.

The contestability period, which usually lasts two years, allows the insurance company to investigate the insured person’s death before paying. If they have reason to suspect the insured person hid information about a health condition, they can refuse to pay. This is what happened to Joan. Search Life Insurance Plans and Rates.

When the insurance agent visited her after the funeral, she assumed it would be to hand her the check. Instead, the agent returned the premiums her husband had paid and explained she would not receive any more money because her husband did not inform them about his heart condition.

Joan’s story is just one of many examples. Even Joan’s late husband was trying to do the right thing for those left behind, hiding information from the life insurance company only ends up causing more hardships than good.

Dishonesty can sometimes hurt even before the contestability period begins. If a life insurance company suspects false or incomplete information on an application, you can be turned down for coverage. Once you are turned down by one provider, being approved through another company becomes more difficult.

The bottom line is that honesty is always the best policy when applying for life insurance. While many factors could cause your premiums to increase, you don’t want to pay premiums that may not amount to anything for your family after you’re gone.

If you do have factors that might increase your premiums, consider taking out a shorter term policy and work towards eliminating those factors if possible. For example, if you remain smoke-free for at least a year, you can reduce your premiums by 50% on average. Reducing your weight, cholesterol, and blood pressure can also positively influence premiums.

Compare quotes, which are easy to get online from a number of different insurance companies. Premiums for the same individual can vary by as much as $500 between providers. By getting quotes based on honest information from several companies you can save money and also have peace of mind knowing your family will be provided for after you’ve died.