What Does the Life Insurance Contestability Period Cover?
The contestability period is a built-in provision designed to protect insurance companies from fraud or undisclosed risk. During this time, if a policyholder dies, the insurer reviews the original application in detail. They’re looking for anything that might qualify as a material misrepresentation—errors or omissions that could have changed the underwriting decision. This doesn’t just mean outright lies. Even honest mistakes or incomplete information can trigger a contestability investigation.
For example, if the insured failed to mention a chronic illness, omitted a smoking habit, understated their weight, or downplayed risky hobbies, the insurer might argue they would have either denied the application or issued it with higher premiums. And while the applicant doesn’t have to have died from the condition they failed to disclose, the mere fact that it wasn’t disclosed can be enough to void or reduce the death benefit.
When Does the Contestability Period Become an Issue?
Not every death during the contestability period is investigated—but many are. The insurer may scrutinize the claim more closely if the policy was newly issued, the death was sudden or suspicious, or the benefit amount is large compared to the insured’s known income or assets. Sometimes it’s as simple as a medical record surfacing that contradicts what was reported on the original application.
Even if you listed a condition truthfully, but the insurer failed to investigate it before approving the policy, they may still try to use it against you after death. This practice is known as post-claim underwriting—and it happens more often than most people think. A death within the first two years almost always prompts a deeper review, even if the cause of death appears unrelated to the application.
How Does the Investigation Work During a Contestability Period?
Once a claim is filed and flagged for review, the insurer will begin collecting medical records, pharmacy histories, application documents, and sometimes interviews with family members or doctors. You or your attorney may be asked to provide supporting information, especially if there’s a dispute over the insured’s medical or lifestyle disclosures. The company isn’t just checking for fraud—they’re also determining whether the policy was valid in the first place.
For instance, if someone marked “no” on the application’s question about prior heart issues, but records later show they were treated for heart palpitations six months before applying, the insurer might argue that the omission justifies denying the claim. Even if the death resulted from an unrelated event, like a car crash, the insurer may still use the omission to argue the entire contract is void.
What Happens After a Contestability Review Is Completed?
Once the investigation is finished, the insurer can either honor the full policy, reduce the payout, or void the coverage altogether. If they determine that the policyholder was truthful and that any errors were immaterial, the benefit will be paid in full—usually with interest added to account for the delay. If the insurer finds that the applicant understated their risk profile but would have still qualified for coverage at a higher premium, they may reduce the payout proportionally to reflect what would have been paid under the correct risk class.
In the worst-case scenario, if the insurer determines that the application included a material misrepresentation that would have resulted in a denial of coverage, they can cancel the policy and refund the premiums—but pay no death benefit. That leaves grieving families with nothing, despite years of faithfully paid premiums.
What If There Was a Lapse and Reinstatement?
Many policyholders don’t realize that if a life insurance policy lapses due to non-payment and is later reinstated, the contestability period resets. So even if the policy was originally issued five or ten years ago, a lapse and subsequent reinstatement restarts the clock. If the insured dies within two years of reinstatement, the insurer once again has the right to contest the claim.
Is There Any Benefit If the Claim Is Approved After Contestability?
Yes. If the insurer ultimately approves the claim after completing a contestability investigation, they are required to pay interest on the death benefit from the date the claim was filed until the payout is made. While this doesn’t erase the stress or financial burden caused by the delay, it does offer some financial relief. In cases where families had to take out loans or put expenses on credit cards while waiting, the interest payment can help offset some of those costs.
What’s the Best Way to Avoid a Contestability Investigation?
The single most effective way to avoid a contestability issue is complete honesty when applying for life insurance. Disclose your full medical history, medications, risky hobbies, and any other relevant information. Don’t omit details because you think they’re minor. Insurance underwriters evaluate risk based on all information provided. Even a seemingly insignificant omission can be labeled material later, especially if the death occurs during the contestability period.
If you’re helping someone apply for coverage—or if you’re reviewing a loved one’s policy—take the time to verify the accuracy of the information provided. And if a contestability investigation is already underway, gather all relevant documents, respond promptly to the insurer’s requests, and consult a life insurance attorney as soon as possible.
When to Contact a Life Insurance Attorney
An investigation during the contestability period doesn’t automatically mean your claim will be denied—but it does mean the insurer is looking for a reason not to pay. This is when having legal representation becomes critical. A skilled life insurance lawyer can communicate with the insurer on your behalf, challenge inaccurate findings, and help ensure the investigation is conducted fairly. They can also push for interest payments, negotiate partial payouts if appropriate, and, if necessary, take the case to court.
At our firm, we specialize in helping families secure the benefits they were promised. Whether you’re facing a contestability investigation, have already received a denial, or just want to protect your rights early in the process, we’re here to help.