Many beneficiaries are shocked to discover that a life insurance claim can still be denied even after the two-year contestability period has passed. While most policies include a two-year window for insurers to investigate potential misrepresentations, that time limit does not guarantee payment forever. The truth is, insurers deny claims after two years more often than most people realize. They typically rely on exclusions, alleged fraud, or procedural loopholes to do it. If you need a life insurance dispute lawyer in Arkansas call us.
If you were told the policy was incontestable and still received a denial letter, you are not alone. You may have a strong case.
What the Two-Year Contestability Clause Actually Means
Nearly all life insurance policies contain a contestability clause. This gives the insurer the right to closely examine the application if the insured dies within the first two years of coverage. If they find that the policyholder omitted a medical diagnosis, concealed smoking, or misrepresented income, they can rescind the policy and refund the premiums rather than pay the death benefit.
Once that period expires, the insurer is supposed to lose that right. That is the theory. In practice, insurers find other ways to avoid payment, especially if the death is suspicious, the policy was large, or the cause of death might fall under an exclusion.
Denials That Still Happen After Two Years
Here are the most common denial scenarios we see after the two-year mark, each based on real disputes we have handled.
Policy Lapse Due to Alleged Nonpayment
Even years into the policy, a single missed premium can trigger a lapse denial. We represented a widow whose husband died three years after taking out a policy. The insurer claimed the coverage had lapsed due to nonpayment, but our review revealed the premium notices were sent to an outdated address after he moved. The policy was wrongly canceled, and we recovered the full death benefit.
Death from an Excluded Cause
Exclusions still apply even after two years. If the policy excludes death from certain high-risk activities, such as piloting a private aircraft or traveling to restricted countries, the insurer may deny the claim based on those terms. In one case, a claim was denied because the insured died while traveling abroad in a restricted country. The policy had a clause excluding deaths in areas subject to U.S. travel warnings. The family had no idea such a clause existed.
Claims Involving Beneficiary Disputes
Years can pass without issue until a beneficiary challenge arises. We have handled claims where the insured’s ex-spouse remained the listed beneficiary even after remarriage. After the insured died, both the current spouse and ex claimed the benefit. The insurer froze the payout and filed an interpleader action, forcing the family into litigation. The dispute lasted over a year before we secured payment for the rightful spouse.
Accusations of Fraud Beyond the Contestability Period
While insurers cannot void a policy for innocent misstatements after the contestability period, they can still allege fraud. Fraud has no time limit. If they claim the insured intentionally concealed something material with the intent to deceive, they may try to deny even years later. The difference between misrepresentation and fraud is subtle but critical. We have seen insurers stretch this definition in an attempt to sidestep the contestability protection.
Denials Based on Technical or Ambiguous Language
Even decades-old policies can be denied if the insurer relies on vague exclusions or obscure policy language. We handled a case where the death was ruled self-inflicted, but the family argued it was accidental. The insurer cited the suicide exclusion, despite the fact that it had expired years earlier. We brought in forensic experts and successfully challenged the interpretation of the cause of death.
Why Denials After Two Years Are Often Wrong
Life insurance companies know that most families will not fight a denial. They also know that contestability period language creates a false sense of security. If they can find any reason to trigger a denial, they will, even if it means twisting the meaning of policy terms or relying on minor inconsistencies.
We have seen insurers deny claims after five, ten, even fifteen years by alleging lapses, exclusions, or wrongdoing by the insured. In many cases, the denial does not hold up under legal scrutiny. But without a life insurance attorney to challenge it, families may be left with nothing.
Real Families, Real Results
We recovered $750,000 for a family in Texas after a policy was denied for supposed nonpayment. The insured had been on automatic bank draft for years. The insurer had changed payment processors and failed to process the July payment, then claimed the lapse voided coverage. It took subpoenaed records and legal pressure to reverse the denial.
In another case, we won a $400,000 payout for a New York woman whose partner died during a hiking accident. The insurer tried to classify the death as suicide and pointed to outdated medical records. We proved it was accidental and forced the carrier to honor the claim.
What to Do If Your Claim Was Denied After Two Years
If you received a denial letter that cites a lapse, exclusion, or post-contestability fraud, do not assume the insurer is correct. Their interpretation is not final. You have legal rights under contract law, and in many cases, the denial can be reversed with evidence and experienced advocacy.
Our firm handles life insurance claim denials nationwide, with a focus on disputes that arise after the contestability period. Whether the issue involves missed payments, alleged fraud, beneficiary confusion, or ambiguous cause of death, we know how to build a case that gets results.
Call us today at 800-330-2274 for a free consultation. Do not let an insurance company rewrite the rules after your loved one is gone.