Buying insurance is often treated as a routine task. Many people rush through long forms, tick boxes casually, and sometimes think, “Hiding a small detail won’t matter.” However, this mindset can prove extremely costly. Experts warn that giving false or incomplete information in insurance forms can lead to claim rejection, policy cancellation, and even legal trouble.
Insurance companies calculate risk based entirely on the details you provide. If those details are incorrect, the entire foundation of your policy becomes weak.
When you apply for any insurance policy—health, life, or term—the insurer evaluates your age, medical history, lifestyle habits, and existing conditions. This process helps them decide:
Whether to approve your policy
How much premium to charge
What conditions or exclusions to add
If you hide facts such as smoking, alcohol consumption, diabetes, heart problems, or previous surgeries, the company may unknowingly issue a policy on wrong assumptions. This becomes a serious issue when you file a claim.
Many policyholders realize the consequences only at the time of claim. If the insurer finds that you gave false information, they can:
Reject your claim completely
Cancel the policy
Deny refund of premium
Start legal proceedings for fraud
As per IRDAI guidelines, misrepresentation or fraud can lead to strict action. In serious cases, legal penalties may include heavy fines and even imprisonment. A small lie can legally be treated as cheating or forgery.
Consider a man named Rajesh who applied for a health insurance policy but did not mention his diabetes. For a few years, everything seemed fine. Later, when he was hospitalized and filed a claim, the insurance company verified his medical records and discovered the hidden condition.
The result? His claim was rejected.
If Rajesh had disclosed his diabetes earlier, he might have paid a slightly higher premium. But his treatment expenses would have been fully covered.
Some common reasons include:
Fear of higher premium
Belief that minor issues are not important
Lack of awareness about legal consequences
Pressure from agents to “keep it simple”
However, in today’s digital age, insurers use advanced tools to verify data. Medical databases, hospital records, pharmacy bills, and digital health IDs make it easier to cross-check information. Hiding facts is riskier than ever.
Modern insurers use:
Digital medical records
Hospital and pharmacy databases
Pre-policy medical tests
Analytics and AI tools
This means even old conditions can surface during claim processing.
To stay safe and protected, follow these steps:
Answer Every Question Honestly
Even if it feels uncomfortable, truth is your best protection.
Disclose All Medical Conditions
Diabetes, BP, asthma, thyroid, heart issues – mention everything.
Be Open About Lifestyle Habits
Smoking, alcohol consumption, or tobacco use must be clearly stated.
Do Not Hide Reports or Tests
Share all medical reports if asked.
Correct Mistakes Immediately
If you realize you made an error, inform the insurer right away.
Yes, absolutely. A slightly higher premium ensures:
Peace of mind
Claim security
Financial protection during emergencies
No legal or emotional stress later
Insurance is meant to protect your family, not create problems for them.
Insurance works on the principle of utmost good faith. The company trusts the information you provide, and in return, promises financial support during difficult times. Breaking this trust can cost you much more than you imagine.
Being honest while filling insurance forms is not just good practice — it is your financial shield.
