What is the life insurance contestability period?

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Are you worried about a denial of your life insurance claim? Life insurance policies often read like complex documents, and part of the policy outlines reasons the company may choose to void the policy. That may make policyholders anxious about their coverage or cause them to believe they aren’t ready to buy a policy. But there’s little to worry about.

In most cases, a life insurance company will typically approve a claim with minimal concern. If an insurance company decides to deny a claim, it’s during the life insurance contestability period.

The life insurance contestability period is the time after buying a life insurance policy in which it can be contested for fraud or misrepresentation. In most states, the contestability period is two years from the date of purchase. This means that if an insured person dies within two years of purchasing a policy, the insurer may investigate to see if any of the information submitted by the applicant was inaccurate or fraudulent. If the information is found to be fraudulent or intentionally inaccurate, the claim may be denied.

Will my life insurance claim be denied?

When someone dies, their beneficiary contacts the insurance company and files a claim. The insurance company then asks a few questions about the insured person’s death, including how and when it occurred.

If the insurance company finds that the insured party violated any of the terms of the policy, including missed premium payments or other fraudulent activity, they may choose to deny it. This would also include misrepresenting their health and/or lifestyle-related information during the application process in order to secure a lower premium rate. 

Generally speaking, death due to illness, natural causes or an accident will not result in denial of an insurance claim. 

Reasons Why Claims Can Be Denied

So what causes of death can lead to a denied claim? Lying on an application is a surefire way to get denied. That includes failing to disclose parts of your medical history, any travel plans, medical conditions or risky hobbies like skydiving or occupations like firefighting. The best way to avoid this problem is to be honest during the underwriting process.

Note that misrepresentations during underwriting don’t have to be related to the cause of the insured’s death. For example, if the insured person dies from cancer but did not disclose that they had a scuba diving hobby, the life insurance company could deny the claim, despite the fact that cancer and scuba diving were unrelated.

A life insurance claim may also be denied if someone fails to designate a beneficiary on their policy. If no beneficiary can be located, the benefits can end up in probate and not go where they’re supposed to. (Probate is a legal term for a process that happens when a person dies that involves authenticating and executing the conditions of their will.)

One final reason for life insurance claim denial is suicide during the two-year contestability period. This suicide clause is in force to ensure applicants do not take their lives immediately after buying a policy.

Denying Claims After the Contestability Period

Of course, some claims can get denied after the contestability period. These deaths can include:

  • Murder (by a beneficiary)
  • Deaths during a risky hobby (such as scuba diving, rock climbing and motorsports)
  • Natural disasters
  • Death that occurs while the insured is committing a crime
  • Death while performing a high-risk job (such as law enforcement, jobs in aviation and active military service)

Remember: failure to mention a risky job or hobby is a significant source of jeopardy for your coverage. Be honest about these things. While it might make coverage more expensive, it certainly beats a complete denial of coverage.

SelectQuote Can Help Find the Right Life Insurance for You

Still have questions about buying the appropriate amount of life insurance coverage? SelectQuote can help. We use special technology that can compare and shop for coverage from carriers faster than a person can typically do on their own. By accurately answering questions about your medical and activity history, we can present you with unbiased quotes from the highly-rated insurance companies we partner with.

For over 35 years, we’ve helped our customers find the right life insurance policy for their budget and coverage needs. To learn more, contact us today to get a free quote.

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