understanding life insurance contestability clauses

When you purchase life insurance, you immediately enter into what’s called a contestability period. During this period of time, which is usually two years, the insurance company can investigate any claim by your beneficiary that’s made for a life insurance payout. It’s also the time period when many insurance companies deny life insurance claims

If you should die during the contestability period, the life insurance company will thoroughly examine the application you originally filled out to see if there are any inaccuracies, omissions, or misrepresentations that invalidate the beneficiary’s claim. 

Important Facts About the Contestability Period

While it’s true that you may have to wait a longer period of time to receive a life insurance payout if your loved one dies during the contestability period, the insurance company will likely pay if there is no evidence of fraud or intentional inaccuracies. However, there is other important information you need to know about this time period, including:

  • If there are mistakes in the original application, the life insurance company will determine if these were unintentional errors or misrepresentation of facts. For example, your loved one may have miscalculated the number of years he stopped drinking alcohol. The insurance company may deny the claim completely, or it might reduce the payout based on the new data.  
  • Some people lie on their life insurance applications so they can get better policy rates. Some lie to get a policy they may not qualify for otherwise. In either case, it’s never a good idea to exaggerate, falsify, or withhold information to get lower rates with the hope that you’ll still be alive after the contestability period has ended. If you lie, your family is at risk of receiving a denied claim after you die. 
  • If your policy lapses and you get it reinstated, you may face another two-year contestability period. Be aware that keeping up to date with your premium payments can help avoid another period where a claim can be investigated.

Contact Marcus Vaden Law 

Coping with the loss of a loved one is difficult enough without dealing with a life insurance company that doesn’t want to pay the benefit it owes you. If your life insurance claim is being investigated or has been denied during the contestability period, attorney Marcus Vaden can help you get the money you deserve. He has successfully fought for the rights of claimants in Arkansas and will help fight for you. Call Marcus Vaden Law today for a free consultation.