What is New Jersey Law for Material Misrepresentations?

In New Jersey, the law surrounding life insurance material misrepresentations is outlined in N.J.S.A. § 17B:24-3. A key point that people are often unaware of is that a material misrepresentation does not have to pertain to the cause of death in order to lead to the rescission of a life insurance policy. Rather, if an omission or misrepresentation, if known at the time of application, would have led the insurance company to either deny coverage or issue a policy at a higher premium, it can be deemed material, regardless of its relevance to the death itself.

For example, if an insured person dies in an airplane crash but failed to disclose a history of diabetes on their application, the insurer may have valid grounds to deny the claim, even though diabetes had nothing to do with why the insured died.

Not all life insurance misrepresentations are considered material; for instance, misstating eye color would likely not be significant because it has nothing to do with a person’s life expectancy. The distinction lies in whether the undisclosed fact affects the insurer’s assessment of risk, i.e. the insured’s life expectancy. A serious medical condition would likely be material, while a less significant one or one that has resolved likely would not.

When it comes to innocent mistakes, New Jersey law often does not excuse them. Many applicants might unintentionally forget details about their health history, and some life insurance agents might encourage clients to omit certain information, believing it to be insignificant. But New Jersey life insurance applicants must be diligent in providing accurate information on their applications, as innocent errors typically do not shield them from denial.

However, there are defenses available against claims of material misrepresentation. You can visit our webpage that discusses them.

You can also read articles written by Eric Dinnocenzo on this topic: “The Postclaims Underwriting ‘Gotcha’” and “Life Insurance Denials Based on Material Misrepresentations: The Application Process, the Law, and Public Policy Collide.”

If faced with a denial, it’s crucial to seek legal advice. A knowledgeable life insurance attorney will analyze the specifics of the application and policy to determine whether a material misrepresentation occurred, and will request the life insurer’s claim file and underwriting guidelines to determine if the claim should be honored. You should not accept a life insurance denial without knowing your rights.

For assistance with a New Jersey life insurance material misrepresentation case, you can contact life insurance attorney Eric Dinnocenzo at (212) 933-1675 for a complimentary consultation.