My mom is applying for a life insurance policy for my father who, up until now, has been the picture of health. A recent medical examination however showed an inoperable growth, which may be cancerous. What happens if my mom lies on the medical questions?
What if your father dies after 2 years from policy issue, and the company has not caught on before then? (It has to act to "rescind" within the 2 years.) Then that's a different story. In some states, even with the actual fraud, your mom may collect; in others if there is real fraud, perhaps not. (BUT your mother then may be the subject of criminal charges, as the statute of limitations is usually far longer than 2 years.)
I strongly recommend not lying. Life is too short. And the possible money you may make by cheating an insurance company -- even if you can get away with it -- is rarely worth the shame and guilt that can result.