AccuQuote, a leader in providing term life insurance quotes to people across the United States, explains life insurance rescission and offers owners and beneficiaries of life insurance policies ways to avoid it.
“The moral of the story is that you should not lie or misrepresent any information on your life insurance application. By lying, you risk leaving your family unprotected when you die." 
Wheeling, IL (PRWEB) January 4, 2010 -- AccuQuote, a leader in providing term life insurance quotes to people across the United States, explains life insurance rescission and offers owners and beneficiaries of life insurance policies ways to avoid it.
According to LOMA (Life Office Management Association, Inc.), rescission is a legal action in which a contract is declared void or cancelled. An insurer usually seeks a rescission of an insurance policy when there has been a material misrepresentation in the insurance application. Misrepresentation occurs when an applicant leaves out health and lifestyle information that directly affects their mortality and actuarial probabilities that determine premium rates.
“When applying for life insurance, don’t leave anything out. By misrepresenting important information about your health and lifestyle, you risk leaving your family without the benefits of your policy when you die,” says Byron Udell, founder and CEO of AccuQuote. “For example, if you tell a life insurance carrier that you’re in perfect health, when in fact, you had a heart palpitation two years ago, that carrier can and will seek a rescission of your life insurance policy, leaving you uninsured.”
Udell suggests the following ways to avoid life insurance rescission:
Understand the difference between warranty and representation – LOMA defines a warranty as a promise or guarantee that a statement of fact is true. If the statement is not literally true, the insuring party has the right to rescind the contract. Alternatively, a representation (or misrepresentation) is a statement made by a contracting party that is relevant to the formation of the contract. Representations that are not substantially true will invalidate the contract.
Know your timeline – Life insurance carriers are granted up to two years after a contract was signed by both parties to identify a misrepresentation that occurred during the life insurance underwriting process. The two year period generally starts from the effective date of the policy. If a misrepresentation is recognized within two years, the carrier will rescind a consumer’s life insurance policy. After the two year window, life insurance carriers are usually without option to rescind the policy or not pay the benefits according to the original terms of the contract.
“The moral of the story is that you should not lie or misrepresent any information on your life insurance application. By lying, you risk leaving your family unprotected when you die,” says Udell. “If you’re concerned about paying a higher premium due to a medical condition, talk to a licensed life insurance agent at a multi-carrier brokerage firm. They can compare underwriting guidelines among the best life insurance companies and give you an affordable life insurance quote based on your individual circumstances. The most important thing to remember is that having some life insurance is better than having no coverage at all.”
About AccuQuote
AccuQuote helps consumers find the best values in term life insurance by combining instant online life insurance quotes with the personal service of unbiased life insurance professionals that can help answer questions, identify important issues, and make meaningful recommendations. The company offers consumers an extensive selection of life insurance options, including term life, whole life, and universal life, as well as selected annuities. The website has many handy insurance tools, including a life insurance needs calculator to help you figure out how much to buy, a glossary that explains industry terminology, a collection of articles that cover the basics about life insurance, and a blog which answer many questions about life insurance. For additional information or to get quotes for cheap term life insurance, please call 1-888-314-4455.
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