Whether a life insurance company can deny a claim after two years depends on many things. Typically, life insurance policies contain a "contestability period" of one to two years from the date of policy issuance. During this time, the insurance company has the right to investigate any claims and deny payment if it discovers any material misrepresentations or omissions made by the policyholder on the application.
After the contestability period expires, the insurance company generally cannot deny a claim based on misrepresentations or omissions on the application, but they can still deny payment if the death was the result of an excluded cause of death, such as suicide or death resulting from criminal activity.
There are many reasons why a life insurance claim may be denied, but here are ten common reasons:
- Non-disclosure or misrepresentation on the application: If the policyholder provides false or misleading information on the application, the insurance company may deny the claim.
- Suicide: Many life insurance policies contain a suicide exclusion clause, which means that the policy will not pay out if the policyholder dies by suicide within a certain period of time after the policy is issued.
- Excluded causes of death: If the policyholder dies as a result of an excluded cause of death, such as participating in high-risk activities or illegal activities, the insurance company may deny the claim.
- Policy lapse: If the policyholder fails to pay the premiums on time and the policy lapses, the insurance company will not pay out the death benefit.
- Death during contestability period: If the policyholder dies within the contestability period and the insurance company discovers that there was a material misrepresentation or omission on the application, they may deny the claim.
- Death while overseas: If the policyholder dies while traveling or living abroad, the insurance company may deny the claim if the policy specifically excludes coverage for overseas deaths.
- Death from a pre-existing medical condition: If the policyholder dies as a result of a pre-existing medical condition that was not disclosed on the application, the insurance company may deny the claim.
- Fraud: If the policyholder fakes their death or causes their own death, the insurance company will deny the claim.
- Beneficiary disputes: If there is a dispute among beneficiaries or the policyholder's estate about who is entitled to the death benefit, the insurance company may not pay out until the dispute is resolved.
- Policy limitations: Some life insurance policies have specific limitations or exclusions on coverage, and if the policyholder dies as a result of a cause that is not covered under the policy, the insurance company may deny the claim.
It's important to carefully review the terms and conditions of a life insurance policy before purchasing it and to make sure that all information provided on the application is accurate and complete. If a claim is denied and you believe it was wrongfully denied, you may want to contact our top life insurance attorneys.