I would never encourage a client to fudge on a life insurance application question, or even kind of skirt around an issue for the sake of getting approved. It’s an open invitation to having a death benefit successfully contested. Honesty is simply and completely the only avenue to take when applying for life insurance, but a common misconception is that, in order to avoid trouble, you should provide more information than is asked for. I’ve even had clients that are practically insistent on making up their own questions and answering them because they believe that surely the life insurance company made an error in not including that question.
Probably the question that is most often twisted into something it really isn’t is the “Do you have plans” type of question. The reality is the life insurance is not asking about your fantasies, but your plans. There’s usually a time frame that goes with the question, for instance an aviation question from Lincoln National, “Have you flown as pilot in command or crew in the last two years or do you plan to fly as pilot in command or crew in the next two years”? I’m currently working with a client who hasn’t flown in 4 years and while he would someday like to get back to flying, as in when the kids are grown and he can afford to gas up the airplane again, he has no current plans to strain his budget or his relationship with his wife by actively planning to take off again. So the answer is NO. He has no plans.
So here’s the meat of the concern. What if he gets divorced and his kids both sign off on him flying again as a birthday present next summer. It asked if he had plans to fly in the next 24 months and 9 months later he is flying. The life insurance company didn’t ask if he would sign something saying he absolutely wouldn’t fly under any circumstances, so help him God. All life insurance is underwritten with the knowledge that life isn’t stagnant and what may be true today, may not be true tomorrow. He’s covered for aviation. What if you take out life insurance and answer no to the sky diving question and a week after the policy goes in force you win a free skydiving tandem jump in a raffle. You really wanted the bass boat, but you take what you get. You are covered for skydiving because there was no plan at the time of application to win that prize. You don’t have to hold on to your sky diving ticket until whatever time frame used in the question passes.
Bottom line. Answer what is asked to the full extent of the absolute truth. Life insurance companies aren’t asking for more. I beat Genworth Life to death over this question, “In the next 2 years, do you intend to travel or reside outside of the U.S. for more than 4 consecutive weeks other than for vacation? ? Yes ? No”. Read that carefully. All they want to know about is any plans to travel outside the US for more than four consecutive weeks (not 25 days) on business or something other than vacation. They finally told me to quit asking. They mean the question exactly as asked and don’t want to know anymore. If you have questions or want to know if your current policy covers some new avocation or occupation, call or email me directly. My name is Ed Hinerman. Let’s talk.