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Here is Illinois' explanation of life insurance fraud:
Misrepresentations and Concealments in the Application for Insurance: An Analysis of the Insurer's Right to Rescind Coverage - FindLaw
So would non-disclosure of a health problem, allow a company to deny a claim after 2 years under Illinois law, because the company argues it is fraud?
The link you included does not directly address that.
I suspect they could, if they could show it was fraud and not a mere misrepresentation. As both Jack and I have mentioned previously, a smart company would see a declaratory judgement first. The problem with fraud is that you would need to show it was knowingly done, not merely an oversight of some sort.
For instance, having a stent 3 years ago and not disclosing that, did you forget or was it intentional? Hard to say without other evidence.
Not disclosing your cancer diagnosis last week, much more likely to be intentional.
Also, don't forget in a fraud case, the insured is most likely deceased. So they can make no statements that either helps or hurts the case. The insurance company will be left looking for other evidence and making a circumstantial case. While strictly my opinion, I think that would be very dangerous to deny a life policy for fraud without very clear evidence. I have seen the USAA lawsuit posted in several FB groups for agents, and almost without fail agents condemn USAA. I can't see the general public being any better and it will be up to the insurance company and its lawyers to convince a jury the recession is justified and overcome that naturally high bar. At least in a trial, the insurance company will be able to present evidence and the jury shouldn't be relying just upon their preconceived ideas.