What is the term for willful deception in an insurance policy by dissemination of information?

The term that best describes willful deception in an insurance policy through the dissemination of information is misrepresentation. This refers to the act of providing false or misleading information, either intentionally or through negligence, which impacts the insurance contract's validity or the insurer's decision to issue coverage.

In the context of insurance, misrepresentation can occur in multiple forms, such as providing inaccurate details on an application or failing to fully disclose relevant information. This behavior can lead to significant consequences, including the denial of claims or cancellation of the policy. Understanding misrepresentation is crucial because it illuminates the importance of honesty and transparency in the insurance process, fostering trust between the insurer and the insured.

The other terms, while related to deceptive practices, do not precisely capture the essence of willful deception through misinformation. Fraud encompasses a broader scope, including any deceitful practice aimed at benefitting unlawfully from an insurance claim or obtaining coverage. Exaggeration refers to overstating certain aspects of a claim or application, while concealment involves hiding crucial information rather than actively misrepresenting it. Thus, misrepresentation is the most fitting term for this scenario.