4 Examples of Life Insurance Concealment - Financial Web

Life-insurance concealment occurs when an individual who is trying to get a life insurance policy does not provide important information to an insurer. This can negatively affect the insurance contract, and it could void the contract if the insurance company finds out the truth. Here are a few examples of situations that could represent life-insurance concealment.

1. Not Mentioning Smoking

One of the most common examples of life insurance concealment is when an individual does not tell the insurance company that he smokes. The individual could smoke two packs of cigarettes per day and then not tell the insurance company this when he fills out the application for a life insurance policy. When he tells the insurance company that he does not smoke, he will receive a less expensive premium. However, smoking significantly increases the risk of the individual to suffer from a number of conditions like lung cancer and emphysema. If the person then dies of a smoking-related illness, the insurance company may not pay the claim because it did not know about the smoking.

2. High-Risk Professions

In some cases, individuals will not disclose their true professions when filling out life insurance applications. Some jobs are much more dangerous than others, and life insurance companies need to know if you work in a dangerous vocation. If you work in a dangerous setting, you could significantly increase the odds of dying at a relatively young age. For example, if you are a sky diving instructor or a coal miner, you have a much more dangerous occupation than the average person. The insurance company will typically charge you more for insurance premiums, or it will deny coverage to begin with. If you die on the job, the insurance company may not pay your claim.

3. Serious Health Condition

Another example of life insurance concealment is when an individual does not disclose to the insurance company that she has a serious illness. Some life insurance companies will not do comprehensive testing that can tell if you have any type of disease. Some companies will require a basic blood test and a physical examination. However, some things will not show up during this examination. If you know that you have something wrong with you and you do not disclose it, this could be considered concealment. If you die from this condition shortly after purchasing life insurance, there is a good chance that the life insurance company will not pay the claim.

4. Dangerous Hobbies

If you engage in dangerous hobbies on a regular basis, your life insurance company should know it. Many people regularly engage in thrill-seeking activities in order to experience a rush. While there is not necessarily anything wrong with this, you should tell your life insurance company if you are at an increased risk of death. For example, if you regularly go bungee jumping or extreme rock climbing, it could have an effect on your life insurance policy. 

via finweb.com