ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -If your insurance company discovers that you misrepresented on your application, they have the right to cancel your coverage which could leave your beneficiaries without financial security to cover any end-of-life expenses like funeral costs, medical bills, and any debt you may owe.

Detailed explanation-2: -Definition: Getting into a contract with a person or a company on false grounds by making statements that are not in accordance with the facts is known as misrepresentation. In an insurance policy, misrepresentation on the behalf of the insured gives the insurance company a right to terminate the policy.

Detailed explanation-3: -Misrepresentation is a false or misleading statement that, if intentional and material, can allow the insurer to void the insurance contract.

Detailed explanation-4: -Making a material misrepresentation in an insurance setting is not only grounds to deny a claim; it might be criminal insurance fraud. For example, if a homeowner burns down their own home in order to collect the property insurance and then claims that the fire was an accident, they would be committing insurance fraud.