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What is the Contestability Period For Life Insurance Claims?

It is critical to understand the terms and conditions of a life insurance policy prior to purchase. One of the most important things you should find out about is its contestability period. The contestability period specifies the time that an insurance company may contest a claim. This claim must be based on fraud or an incorrect interpretation of the policy application.

How Contestability Period is Defined

The insurance company has a set time period in which they may challenge or contest the claim made on an insurance policy. Usually, this contestability period starts on the policy’s effective date through a specified amount of time. Usually, this is around two years.

An insurance company can investigate the policyholder’s application for inaccuracies, misrepresentations, or omissions during the period of contestability. If discrepancies are found, the insurance company can deny the claim or may pay less to the beneficiary.

The Purpose of Contestability Periods

Costestability periods assure the insurance company that the policyholder has supplied the proper information on their life insurance policy application. This limits the number of fraudulent claims, therefore keeping insurance premiums more affordable.

How the Contestability Period Operates in Arizona

In Arizona, life insurance policies have a two-year contestability period. Meaning that policyholders who die within two years of their policy’s start date may have their policy investigated to ensure all of the information they provided was accurate.

During the two years the insurance can contest the claim, they have the right to request information and investigate the following:

  • Medical records may be requested to ensure that any medical information on the application is accurate.
  • The insurance company will review the application to ensure the policyholder provides truthful, accurate information.
  • The policyholder’s lifestyle might also be up for investigation. This can confirm that they did not have a history of fraudulent activity, did not smoke if they claimed they did not and did not falsely represent their finances.

If they find inaccuracies, omissions, or misrepresentations, they may deny the claim or not pay the entire amount.

What Happens if the Policyholder Lives Longer Than the Contestability Period

If the policyholder lives over two years before passing away, the insurance company cannot contest the policy claim based on fraud or misrepresentation. Although, they can still deny a claim for other reasons. This could be because the policy lapsed since payments were not made or if the cause of death was excluded from the policy.

Things to do During the Contestability Period

When applying for a life insurance policy, the applicant must be open and perfectly honest when providing information. Disclose medical conditions that may be relevant and truthfully answer all questions.

Named beneficiaries of a life insurance policy should be truthful with the life insurance company if the policyholder dies before the contestability period ends. If you are unclear about the information provided by the policyholder, it is essential to speak with an attorney.

Contact an Attorney Today

When applying for a life insurance policy or trying to file a claim on one, you should understand the details about the contestability period. Always provide accurate information to avoid problems when it is time to collect the benefits.

If you have any questions about life insurance, the contestability period, or the questions being asked by the insurance company, contact one of our experienced attorneys today. The knowledgeable, experienced attorneys at Surrano Law Offices understand how to guide you through the complicated contestability period.