Does your life insurance application process incentivize misrepresentation?

In many life insurance application workflows, verification happens too late to influence the earliest application decisions. Misrepresentation or purposeful omissions of critical details such as an applicant’s criminal history, driving issues or financial instability commonly occur.  For instance, our internal research has found that 56% of applicants with a criminal record fail to disclose it and 48% of omitted driver’s licenses do, in fact, exist. Bad actors know that the data in these fields is probably not checked until later in the process, if at all. By the time discrepancies are uncovered, the application may already require costly rework, additional review or difficult downstream decisions.

Non-disclosure and fraud can contribute to operational inefficiency through manual underwriting review, incorrect premiums and mortality slippage. Teams must spend more time resolving preventable issues while legitimate, low-risk applicants may experience delays because resources are tied up handling cases that should have been identified earlier. Ultimately, everyone pays for gaps that fraudsters know how to exploit.

Timing is everything. Early-stage blind spots can make it harder to distinguish honest mistakes from deliberate omissions, leaving insurers to address risk after it has already moved deeper into the workflow.

How LexisNexis® Life Smart Path Helps

Life Smart Path helps carriers shift key risk insights earlier into the application process to help identify discrepancies at the point of submission. Earlier validation means insurers can better screen for misrepresentation while clearing a more efficient path for legitimate applicants. The result is better-informed decisions before risk has a chance to compound.