Which term describes the act of deceiving to obtain life insurance benefits?

Which term describes the act of deceiving to obtain life insurance benefits?

• A. Fraud
• B. Representations
• C. Death benefit
• D. Indemnity

Answer: (A)

Deceiving to obtain life insurance benefits is fraud. Fraud involves intentional misrepresentation or concealment of facts that are material to the insurer’s decision to issue the policy or to pay a claim. Lying about health, age, smoking status, or other important information to get insured or to claim benefits is exactly the kind of deception insurance law treats as fraud. If discovered, the insurer can deny the claim or even void the policy from the start, and legal remedies may follow. The other terms don’t describe the act. Representations are statements made on or with the application; they can be true or false, but the word here points to the wrongdoing of deceiving. Death benefit is simply the payout amount, not the act of deceit. Indemnity is the principle of compensating losses, and while life insurance pays a set amount, the focus of this question is the act of deceiving, which is fraud.

Deceiving to obtain life insurance benefits is fraud. Fraud involves intentional misrepresentation or concealment of facts that are material to the insurer’s decision to issue the policy or to pay a claim. Lying about health, age, smoking status, or other important information to get insured or to claim benefits is exactly the kind of deception insurance law treats as fraud. If discovered, the insurer can deny the claim or even void the policy from the start, and legal remedies may follow.

The other terms don’t describe the act. Representations are statements made on or with the application; they can be true or false, but the word here points to the wrongdoing of deceiving. Death benefit is simply the payout amount, not the act of deceit. Indemnity is the principle of compensating losses, and while life insurance pays a set amount, the focus of this question is the act of deceiving, which is fraud.