Most life insurance policies include a two-year contestability clause. This allows the insurance company to investigate and potentially deny claims if the insured dies within the first two years after the policy becomes effective. During this time, the insurer has broad authority to:
Review the insured’s application for accuracy
Examine medical records, pharmacy histories, and toxicology reports
Investigate social media posts or other evidence of lifestyle misrepresentation
Compare submitted statements to actual conditions at the time of application
If they find anything they believe constitutes a material misrepresentation or omission, they may attempt to rescind the policy entirely and deny the death benefit.
Why Life Insurers Deny Claims During the Contestability Window
Life insurance companies deny claims during the contestability period for two primary reasons:
To avoid paying large death benefits on policies issued based on incomplete or false information
Because they count on grieving families not knowing their rights or being unwilling to fight back
They often couch these denials in complex language, hoping beneficiaries won’t understand they have legal options. If the insured answered a question incorrectly, omitted a condition, or misunderstood an application question, the insurer may still try to use that information to avoid payment—even if the misstatement had nothing to do with the actual cause of death.
What Does 'Material' Misrepresentation Mean?
A misrepresentation is considered “material” if it would have impacted the insurer’s decision to issue the policy at all—or would have led to a different premium or policy structure. For example:
If a smoker checks “non-smoker,” and the insurer later discovers medical records or Facebook photos suggesting otherwise
If the applicant omits a preexisting health condition
If the applicant downplays alcohol or drug use
But the insurance company has to prove two things:
That the statement was false or omitted
That the truth would have affected their underwriting decision
In some states, even a confirmed misstatement doesn’t automatically void the policy. If it wasn’t intentional, and wouldn’t have changed the insurer’s ultimate decision to issue coverage, courts may require the insurer to pay the death benefit—or at least the amount that would have been approved under correct information.
Example: A Smoking Status Dispute
Imagine this scenario:
A 40-year-old man applies for a $500,000 life insurance policy, indicating he’s a non-smoker
He pays $50/month for standard, non-smoker coverage
A year later, he dies in a car accident
The insurer investigates and finds medical records and social media photos showing he was smoking
They try to rescind the policy, deny the claim, and refund the premiums
Can they do that? Not so fast. A skilled attorney might:
Force the insurer to prove he was actively smoking at the time of application
Show that the smoking had no connection to the cause of death
Compel the insurer to pay a prorated benefit—for instance, $250,000 instead of $500,000—if that’s what $50/month would have purchased for a smoker
What Happens After the Two-Year Period Ends?
Once the contestability period ends, life insurance companies have far fewer legal tools at their disposal. To deny a claim after two years, they typically must prove:
The misrepresentation was intentional, and
It involved a material fact that would have affected coverage
The burden of proof shifts dramatically. That’s why insurers scrutinize early claims so closely and often try to deny quickly—because their window of opportunity is limited.
Warning: Refund Checks Can Be a Trap
If the insurance company sends you a check refunding all premiums, be very careful. Cashing that check may be interpreted as your agreement to rescind the contract. This is a common tactic insurers use to close the case quietly. Never cash such a check without speaking to a life insurance lawyer first.
Your Rights If a Policy Is Rescinded or a Claim Denied
Life insurance companies are banking on the fact that most beneficiaries won’t hire an attorney. But with the right legal representation, many of these denials can be overturned or significantly reduced in scope. Our firm has successfully:
Challenged rescissions during contestability periods
Forced insurers to honor partial payouts based on adjusted underwriting
Proven that misstatements were unintentional or immaterial
Uncovered insurer bad faith in denying or delaying valid claims
Don’t Accept a Denial Without a Fight. Call Our Life Insurance Lawyers Today.
If your life insurance claim has been denied or delayed—especially during the two-year contestability period—contact us immediately. These cases are time-sensitive and complex. You need a legal team that understands both the policy language and the state law that governs it. We’ve overturned countless wrongful denials and recovered millions for families who were initially told “no.” If you need life insurance claim help in Georgia call us.
Call now for a free consultation. There’s no obligation—and you won’t pay a dime unless we recover money for you.