Denied Life Insurance Claim Due to the Contestability Period? We Can Help
We recently recovered a $100,000 life insurance benefit for a client whose claim had been wrongfully denied during the contestability period. The insurer claimed that minor discrepancies on the application justified withholding payment. But with our help, the family received every dollar they were owed. If you’re dealing with a denied claim related to the contestability period, it’s critical to understand your rights—and how to fight back.
What Is the Contestability Period in Life Insurance?
The contestability period is a time-limited window—typically the first two years after a life insurance policy goes into effect—during which the insurer has the legal right to investigate the accuracy of the information provided in the application. If the policyholder dies during this period, the insurance company can review the original application, medical records, and other documents to determine whether the applicant made any material misstatements or omissions.
How Long Does the Contestability Period Last?
In most cases, the contestability period lasts two years from the policy’s effective date, although some group or employer-sponsored policies may have slightly different terms. Once the two-year window expires, the insurer usually cannot deny a claim based on application errors—unless the company can prove intentional fraud.
Why Claims Are Denied During the Contestability Period
Life insurance companies often use the contestability period as a tool to avoid paying valid claims. If the insured dies within that two-year window, insurers scrutinize the original application and try to find any inaccuracies they can use to justify rescinding the policy. Common reasons for denial include:
Undisclosed medical conditions such as diabetes, high blood pressure, or prior surgeries
Misstated lifestyle factors like tobacco use, alcohol consumption, or dangerous hobbies
Incorrect age or employment information
Incomplete answers or omissions that were not caught during underwriting
While some errors may be unintentional, insurers often treat them as material and use them to deny payment entirely, instead offering to refund premiums paid. This is where legal representation becomes critical.
What Happens After the Contestability Period Ends?
After the contestability period expires, the insurer typically cannot deny the claim due to misrepresentations or omissions on the application. The policy becomes “incontestable”, meaning the death benefit must be paid as long as premiums were paid and there is no fraud involved. However, insurers may still deny a claim for other reasons—such as excluded causes of death (e.g., suicide within two years), criminal activity, or a lapsed policy due to nonpayment.
How We Help Clients Win Contestability Claim Disputes
In our recent case, the insurer claimed the deceased had failed to disclose a minor medical issue—but our investigation proved that the question on the application was vague, and the client had answered truthfully to the best of their knowledge. We filed a formal appeal and provided supporting medical and legal documentation to challenge the denial. Within weeks, the insurer reversed their decision and paid the $100,000 in full. We’ve done the same for many other families.
If your life insurance claim was denied due to the contestability period, we can help. Our attorneys know how to challenge improper rescissions, expose insurer bad faith, and recover the benefits you were promised.
Contact Our Life Insurance Lawyers for a Free Consultation
Don’t let the insurance company use the contestability clause as an excuse to avoid paying. We’ve recovered millions for families whose claims were wrongfully denied under this clause. Call us at 800-330-2274 or use the contact form on this page to schedule your free consultation today.
FAQ: Life Insurance Contestability Period
What is the purpose of the contestability period?
The contestability period gives life insurance companies the opportunity to verify the truthfulness of information provided in the application. It protects insurers from fraud and misrepresentation during the first two years of coverage.
Can an insurer deny a claim for any reason during the contestability period?
No. The insurer must show that a material misrepresentation or omission occurred and that it would have affected their decision to issue the policy or determine the premium.
Is a death benefit automatically denied during the contestability period?
No. The claim will be reviewed more closely, but if no material errors are found, or if the insured answered honestly, the claim should still be paid.
What qualifies as a material misrepresentation?
A material misrepresentation is a false or omitted statement that would have changed the insurer’s decision to issue the policy. For example, failing to disclose a cancer diagnosis would be material, while forgetting to list a minor cold is likely not.
Can a claim be denied if the insured answered incorrectly but didn’t know the truth at the time?
Insurers often deny claims even when answers were unintentional. However, courts may side with the beneficiary if the error was made in good faith and did not involve fraud.
What happens if the insured dies after the contestability period?
The policy becomes incontestable except in cases of proven fraud. The insurer cannot void the policy due to past application errors or medical history.
Can an insurer rescind a policy during the contestability period?
Yes. If they discover a material misrepresentation, they may attempt to rescind the policy, refund premiums, and avoid paying the death benefit. This can be challenged in court.
How do I fight a denied claim during the contestability period?
Hire a life insurance attorney. You’ll need to review the application, policy terms, and the insurer’s investigation. A lawyer can build a case that shows the insured answered truthfully or that the error was immaterial.
What if the application was completed by an insurance agent?
If the agent filled out the form or misled the applicant, the insurer may still be held responsible. Courts may rule that the applicant acted in good faith.
Can the insurer use the contestability period to delay paying a valid claim?
Yes, and they often do. Even minor discrepancies can lead to months-long investigations. If the delay is unreasonable, legal action may be necessary.
What if the insured was never told about the contestability period?
The contestability clause is standard and included in most policies. Courts generally uphold it even if the policyholder wasn’t fully aware—but the insurer must still prove misrepresentation.
Do ERISA-governed life insurance plans have contestability periods?
Yes, group life insurance under ERISA typically includes contestability periods, though procedures for appeals and lawsuits follow federal law.
Is the contestability period the same as the suicide clause?
No, but they often overlap. The suicide clause also lasts two years in most cases and excludes death benefits for suicide during that time. After two years, suicide is typically covered.
Can contestability be waived?
Not usually. It’s a standard clause. However, if the insurer failed to investigate during the two-year period or continued accepting premiums, it may be argued they waived their right to contest.
Does the contestability period restart if a lapsed policy is reinstated?
Yes. In most policies, reinstating coverage restarts the contestability period, allowing the insurer to contest the policy again for two more years.