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Lying for their life: 3.8 million Australians are untruthful on life insurance applications

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Millions of Australians have told a fib in order to get a discount on their life insurance policy, according to new research by Finder.

The nationally representative survey of 1,000 respondents found that 20% of Australians – equivalent to over 3.8 million people – have lied in order to get a cheaper policy.

The research found men (29%) are more likely than women (11%) to be less than truthful on a life insurance application.

Being a smoker is one of the biggest reasons for misleading a provider (9%), as is mental health (9%).

This is followed by the nature of one's job (8%), alcohol consumption (7%), a pre-existing condition (6%) and hobbies such as extreme sports (4%).

The survey also found that a worrying 41% of Australians don't have life insurance.

James Martin, insurance editor at Finder, said lying on insurance applications is a dangerous game.

"Insurance premiums are based on the risk you represent.

"If you've previously lied about your circumstances when filling out your insurance application, your insurer could well void your claim.

"If you were to pass away, this could leave your loved ones in the lurch financially. In serious cases, you could even be sued for insurance fraud," Martin said.

The research found 35% of men are without life insurance cover and this increases to 47% for women.

Martin said the prospect of life insurance can be uncomfortable.

"It's easy to think 'this won't happen to me', but the truth is that nothing in life is certain.

"I'd encourage Australians to make life insurance a regular part of their financial planning," he said.

Of those with life insurance, gen X and gen Y were the least truthful when it came to their life insurance applications, with just 57% and 55% respectively saying they hadn't lied on their application.

Martin said the best thing to do if you've been less than honest in your application is to "come clean" to your insurance company.

"It could mean that your policy is cancelled, put up in price or there could be no impact at all.

"Either way, honesty is essential – otherwise you could be sitting on a worthless policy.

"It's a good idea to compare life insurance policies and shop around online to find one that's best for you," Martin said.

Have you ever been less than truthful about any of the following to get a discount on your life insurance policy?
I don't have life insurance41%
No, I haven't lied on my application39%
Smoker status9%
Mental health9%
Nature of employment (e.g. didn't disclose a dangerous job)8%
Alcohol consumption7%
Pre-existing condition6%
Hobbies (e.g. extreme sports)4%
Source: Finder survey of 1,000 Australians in May 2021

Visit Finder's Life Insurance hub to compare life insurance brands in Australia.

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