Misrepresentation

What Does Misrepresentation Mean?

Misrepresentation, in the context of insurance, refers to the act of providing false information during an interview or on an application for a policy. This misrepresentation may be minor enough that the insurer only needs to update the policy, or it may be significant enough to provide valid grounds for voiding the contract.

Insuranceopedia Explains Misrepresentation

For example, an erroneous statement regarding the length of previous coverage, such as stating it was 10 years instead of 11, would likely lead to the insurer updating and adjusting the contract as necessary. In contrast, concealing a major illness could result in the contract being voided. This is why life insurance applications ask detailed health questions, and why policies that skip those questions, such as the options compared in our guide to the best no medical exam life insurance companies, tend to cost more and cap coverage at lower amounts.

Misrepresentation may be unintentional, but if it is material, meaning it is significant enough to influence the insurer’s decision to provide coverage or include specific terms, the insurer may void the contract. However, in some cases of material misrepresentation, the insurer may still consider the policy valid. Since the information an insurer requests is meant to assess the level of risk a potential policyholder presents, any misrepresentation on an insurance application may be presumed material, as it could ultimately affect the insurer’s decision to provide coverage and under what terms. The answers you give also feed directly into pricing, which is one of the factors that impact the cost of a life insurance premium, so errors on an application can change both what you pay and whether a claim is honored later.