What happens if I lie in my application?

A lot of people ask us if they need to be honest. The short answer is definitely yes. The reason is kind of a long story...‍

How does insurance work?

Insurance works like this: you pay us every month, and in return, we pay out if something happens to you. For example, if you have Life Cover and you die, we pay out a lump sum to the people you’ve left behind. 

Exactly how much you pay us every month, and how much we will pay out, depends on something called your risk profile. This is where we work out how likely it is that someone with your age, medical history, occupation, and so on will die while you are covered by us. Then we pool everyone’s payments and use that big pot of cash to pay out when someone claims. 

If you add up all the premiums you pay over a lifetime, often your payout is worth more. Insurers can afford to do this because other people will stop their policy before they have claimed. (For example, someone might keep the policy while the kids are still at home, or until the bond is paid off, and then decide they don’t need the policy anymore.) Because insurers have a lot of data, and lots of policyholders, they can make sure they charge enough to pay whatever claims they need to.

If we don’t know the full story, your risk profile won’t be accurate, so we might charge you less than we should. If that happened too often, then we wouldn’t be able to pay claims because we wouldn’t have enough cash in the pool. If clients didn’t give us accurate information, we’d have to charge everyone a lot more to stay in business.

So, to keep premiums as low as we can for everyone, we have to investigate whether the information you gave us is true. We can’t do this upfront for every policy because it would be too expensive, so we only do it when you claim. Most people are honest when they take out a policy, but just in case someone is trying to defraud us, we have to double check. We don’t go looking for a reason not to pay.

What happens if you’re dishonest

If we find out at claims stage that the information you gave us at quote stage is false, we act as if you made an honest mistake. We’ll work out how much cover we would have given you if we’d had the full picture, and how much we would have charged you, and we’ll recalculate the payout. So there’s a good chance you’d get less than you thought you would.

In some cases, we might find that we wouldn’t have offered you cover at all. If that happens, your claim might be denied and you won’t get anything . 

We don’t want this to happen to you because our reputation is built on your positive experience of our company. Which is why we try to make it super clear in our quote process and policy schedule exactly what you are covered for. 

If you have any questions, please let us know.