CLHIA-ACCAP - Consumer Information

A guide to life insurance

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26 WHAT HAPPENS WHEN YOU APPLY Failure to provide accurate and complete personal information could invalidate your insurance coverage. Occasionally, an applicant may discover that a fact has been omitted or innocently misrepresented on the application. In that case, the insurance company should be notified immediately so that any necessary adjustment can be made. If such errors are discovered when a claim is submitted, the company's action will depend on the nature of the misinformation. For example, if the age has been reported incorrectly, the insurance company will usually adjust the benefits accordingly and pay the claim. However, if smoking status or other vital information has been misrepresented, the insurer may deny the claim and pay only a refund of premiums. By law, a life insurance policy, including the application, is incontestable after two years. After that time, except for fraud, a company cannot deny a claim because the information you provided was incorrect or incomplete. (For more information, see page 34.) What if there's an error in my application? If you pay the first premium with your application, the agent usually provides you with a conditional or temporary insurance agreement. This gives you interim life insurance, under certain conditions as outlined in the agreement, during the time it takes the insurance company to review your application. Sometimes, the interim coverage takes effect immediately and other times, it doesn't take effect until all evidence requirements have been met. Check with your agent. Before final approval: The conditional or temporary insurance agreement

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