I would imagine that someone who is not truthful on the application can end up getting denied benefits of caught.
In the case of life insurance, the insured isn't the one getting benefits (except in the case of a disability waiver, or LTC rider).
All states have 2 year contestability periods and suicide exclusions. Once the policy is in force for two years, insurance companies will usually not try to contest a claim, as the burden of proof is on them, and it's an uphill battle to legally prove intentional fraud.