You’ve probably heard of the Contestability Period, which is the two years following the purchase of life insurance during which a life insurance company can contest the beneficiary’s rights to the death benefit due to a misstatement or omission on a policyholder’s application for life insurance and medical questionnaire.
So what is an “incontestability clause?” Find out from the nation’s top life insurance lawyers at Boonswang Law. And if your life insurance company denied your claim or rescinded your coverage due to an alleged misrepresentation by the policyholder, call us. We will discuss your case with you free of charge. Our life insurance lawyers have gotten countless clients paid when their claim was initially denied due to misrepresentation.
Incontestability Clause Definition
An “incontestability clause” in life insurance is a policy provision that disallows a life insurance company from voiding coverage due to a misstatement by the policyholder after a specified period of time has elapsed since the policyholder purchased life insurance. This period of time is usually two years, but may be more.
How an Incontestability Clause Benefits Policyholders
Most life insurance policies include an incontestability clause, which closes the door on the contestability period and prevents life insurance companies from denying beneficiaries’ claims due to a misstatement or omission on the policyholder’s initial application for life insurance and medical questionnaire.
The incontestability clause helps policyholders realize their goal in purchasing life insurance, which was to make sure their loved ones got a payout in the event of their death. It also protects beneficiaries from any mistakes or omissions in the policyholder’s application for life insurance and medical questionnaire.
Exceptions to an Incontestability Clause
Life Insurance Fraud
If a policyholder fraudulently completed their initial application for life insurance and medical questionnaire, the incontestability clause will not protect them or their beneficiaries.
For example, if the policyholder intentionally lied about having a smoking habit and dies within the contestability period, the life insurance company will rescind the policy and beneficiaries’ claims for the death benefit. If the policyholder dies after the contestability period, when the incontestability clause is in effect, the life insurance company will still deny beneficiaries’ claims.
The definition of life insurance fraud varies from state-to-state. In many states, the life insurance company must show that the policyholder intended to deceive. The life insurance lawyers at Boonswang Law have over 30 years of combined experience helping life insurance beneficiaries get what they deserve in every state in the country. Call us for help if your claim was denied due to alleged fraud or misrepresentation.
Misstating Age or Gender
In some states, when the policyholder mistakenly recorded their age or gender on their initial application for life insurance, the life insurance company cannot void coverage. Instead, they must subtract what they would have been paid in premiums from the death benefit, and pay the death benefit to the beneficiary.
Purchasing Life Insurance When Deathly Ill
As a matter of public policy and to protect consumers from high premiums, life insurance companies are allowed to deny claims for death benefits during the first two years or coverage, called the contestability period, when the policyholder makes a misstatement or omits information on their initial application for life insurance and medical questionnaire.
The contestability period protects life insurance companies from having to pay death benefits when the policyholder was so ill when they applied for life insurance that they died shortly thereafter. It is this type of scenario, along with policyholders contemplating ending their own lives, that the contestability period was intended to cover.
Tolling the Contestabilty Period
If the policyholder becomes disabled shortly after purchasing life insurance coverage and within the contestability period, the contestability period is “tolled” or continued and an incontestability clause will not take effect.
Talk with an Experienced Life Insurance Lawyer
If your claim for death benefits was denied due to death within the contestability period or death under the incontestability clause but the policy was rescinded due to fraud or misrepresentation, call us for help getting your payout. We have helped life insurance beneficiaries across the nation get the payout their loved ones intended.
In some cases, the policyholder may have made a minor mistake and you can get the death benefit minus what the policyholder would have paid in premiums had they not made that mistake. In other cases, the policyholder did not make the alleged mistake or omission with the intent to defraud, such as when the policyholder does not disclose a medical condition they did not know they had.
In more cases than not, we are able to get our beneficiary clients paid when their claim for death benefits was initially denied due to death within the contestability period or death thereafter when the policyholder allegedly committed fraud. We only take cases on a contingency basis, meaning that we do not get paid unless and until you do. Call us for help – you have nothing to lose and everything to gain.