A recent case involving a $200,000 TransAmerica policy denial illustrates how aggressive tactics from life insurers can be overcome with fast and strategic legal action. After the claim was initially denied, we stepped in, challenged the basis of the denial, and secured full payment for our client in just 11 days.
The Contestability Period: What It Means for Life Insurance Claims
Most life insurance policies include a contestability clause—a contractual provision that allows the insurer to investigate and potentially deny claims made within the first one to two years of the policy. During this time, insurers review the application for any inaccuracies or omissions they can argue were material to their underwriting decision. If they discover anything they believe would have changed the terms or approval of the policy, they may attempt to rescind the coverage and return the premiums rather than pay the death benefit.
This period is critical. Even minor misstatements—such as an incomplete medical history, incorrect smoking status, or omitted treatments—can be used to void the policy. However, once the contestability period expires, the insurer is generally required to pay claims unless it can prove fraud, which involves an intentional effort to deceive.
Understanding What Constitutes a Material Misstatement
Not all mistakes on a life insurance application rise to the level of material misstatements. The legal definition of “material” is anything that would have affected the insurer’s decision to issue the policy or determine the premium. This includes:
Failure to disclose major health conditions such as diabetes, heart disease, or cancer
Misrepresenting smoking habits or alcohol use
Omitting high-risk hobbies like skydiving, scuba diving, or motorcycle riding
Falsifying income, occupation, or criminal history
In practice, many insurers interpret "material" very broadly. In our TransAmerica case, the claim was denied because the policyholder had omitted a past medical diagnosis. The insurer argued that this information would have changed the underwriting decision. But our legal team uncovered evidence that the condition had little impact on the risk profile and would not have changed the outcome. We demonstrated that the omission was not material—and within days, the denial was overturned, and the family received the full $200,000 benefit. Contact us if you have a Wisconsin life insurance policy dispute
FAQ: Life Insurance Denials for Material Misstatements
What is a material misstatement in a life insurance application?
It’s a false or omitted statement that would have influenced the insurer’s decision to issue the policy or determine the premium. Insurers can use this to void policies during the contestability period.
How long is the contestability period?
Typically one to two years from the date the policy is issued. After this period, the insurer can only deny a claim for fraud, not for innocent errors or omissions.
Can a claim be denied for a condition unrelated to the cause of death?
Yes, insurers often deny claims even if the alleged misstatement had nothing to do with the death. However, this tactic can often be challenged and overturned.
What if I forgot to disclose a minor medical condition?
If the condition would not have changed the underwriting decision, it likely isn’t material. An attorney can help assess whether the insurer’s denial is legally valid.
Do all misstatements lead to denial?
No. The insurer must prove that the misstatement was both false and material. If the omission was unintentional and irrelevant to the risk assessment, the denial can be contested.
What happens after the contestability period ends?
After the period expires, the insurer can no longer rescind the policy unless it can prove outright fraud. This significantly reduces the risk of denial.
Can I fight a denial myself?
You can try, but insurers often use complex legal language and internal policy interpretations. Having an experienced life insurance attorney improves your chances dramatically.
What should I do if I receive a denial letter from TransAmerica or another insurer?
Don’t respond immediately. Gather all documentation and contact a life insurance attorney who can review the policy and denial, then guide you through your options.
Do you charge upfront for handling these cases?
No. Our firm works on a contingency basis—you pay nothing unless we recover your benefits.
How long does it take to resolve a denied life insurance claim?
Every case is different, but many are resolved within weeks. In our TransAmerica case, we recovered the full benefit in just 11 days.