Life Insurance Incontestability Clause Cases: Real Claims, Real Denials, Real Legal Battles
Life insurance companies often invoke the contestability clause to deny claims within the first two years of a policy’s issuance. While they claim this is to prevent fraud, the clause is frequently used to avoid paying grieving families—especially when the insurer had all the information it needed to conduct a proper investigation before issuing the policy. Our experienced life insurance lawyers have successfully handled many such cases where insurers tried to rescind a policy after a death by pointing to alleged misstatements. Below are real examples where claimants pushed back—and in several cases, won.
Minnesota Life: Policy Voided After Heart Attack Within Two Years
After a man died of a heart attack within two years of securing coverage, Minnesota Life denied the widow’s claim, citing medical misrepresentation. She argued that the insurer waived its right to contest the claim by accepting ongoing premiums and issuing the policy without further scrutiny. This case spotlighted how insurers may claim fraud even when they had every opportunity to investigate the applicant’s medical history beforehand.
North American Life: Cancer Diagnosis Sparks Bad Faith Claim
When a woman died of cancer shortly after acquiring coverage, North American Life denied the claim on the basis of an allegedly incomplete application. Her husband filed a lawsuit for bad faith and violation of the state’s Insurance Code. The argument? That the insurer had weaponized the contestability clause, failing to disclose concerns during the underwriting phase but later seizing on the diagnosis to deny the payout.
Baltimore Life: Overdose and Alleged Drug Use Misstatements
A man died from a drug overdose within two years of buying a policy. Baltimore Life rejected the death claim, asserting that he had misrepresented his drug use history. His widow alleged breach of contract and bad faith. Even in cases involving substance use, courts may find that an insurer cannot rescind a policy if it failed to conduct a diligent underwriting process.
Boston Mutual: Stroke and Application Accuracy Dispute
Boston Mutual Life denied benefits after a stroke-related death, claiming that the deceased had not fully disclosed prior medical events. The widow filed a bad faith claim, accusing the insurer of violating deceptive trade laws. Courts have previously found that misrepresentation must be both material and intentional—something insurers often fail to prove in court.
Ladder Life: Car Accident Case Results in Victory for Widow
Unlike other cases, the insured in this instance died in a car accident. Ladder Life denied the claim, alleging prior undisclosed medical conditions. The widow sued, arguing breach of contract and bad faith—and she won. This case reveals how insurers may try to tie unrelated causes of death to prior conditions, even when no link exists.
Southern Farm Bureau: Contestability Period Dispute Over Heart Attack
South Farm Bureau Life declined to pay after the insured died of a heart attack, citing non-disclosure of medical history. The widow countered that by accepting premiums and issuing the policy without flagging concerns, the insurer had waived its contestability rights. The legal question became not what was disclosed, but what the insurer did—or didn’t do—with the information it had.
Ohio National: Another Cancer Case, Another Legal Victory
In a case mirroring others, Ohio National denied a claim after a woman died of cancer. Her husband challenged the denial and prevailed, alleging bad faith and violations of insurance regulations. These outcomes suggest a growing trend in which courts push back against insurers using vague allegations to justify claim denials.
Country Financial: Overdose Denial Met With Legal Challenge
Country Financial refused a claim following a fatal overdose, accusing the deceased of failing to disclose past drug use. The widow filed suit for breach of contract and bad faith. Whether the insurer conducted an adequate review at the application stage became central to the case, rather than the circumstances of death.
Lumico Life: Stroke Case Ends in Win for Beneficiary
After Lumico denied a claim related to a stroke, citing omissions in the application, the widow alleged deceptive practices and bad faith—and won. It’s a reminder that insurers must prove both the materiality and intent behind any alleged misstatements to legally void a policy.
Great West Life: Heart Attack and Waiver of Contestability Rights
Great West Life also denied a heart attack claim during the contestability period. The widow sued and won, citing breach of contract and insurer misconduct. These cases emphasize how “contestability” is not an automatic out for insurers—especially when they ignore red flags during underwriting.
CNO Financial: Familiar Pattern of Denial Over Health History
CNO Financial followed the usual playbook, pointing to alleged misstatements after a heart attack. The widow's legal challenge centered on the insurer's lack of due diligence. Courts often scrutinize whether the company could have uncovered the same information before issuing the policy.
Iowa Farm Life: Brain Aneurysm Case Results in Consumer Fraud Finding
Iowa Farm Life denied a claim after a man died of a brain aneurysm. The widow sued under the Consumer Fraud Act, alleging bad faith—and won. Fraud statutes vary by state, but many offer beneficiaries a path to challenge unjustified denials.
Chesapeake Life: Another Victory Over Alleged Medical Misstatements
Chesapeake Life tried to avoid paying after a heart attack death, claiming the husband had misrepresented his health. The court sided with the widow, finding that the insurer failed to demonstrate material misrepresentation or justify its denial under the contestability clause.
Constitution Life: Pulmonary Embolism Case Triggers Legal Scrutiny
When Constitution Life denied a claim following a pulmonary embolism, the widow filed suit under the state’s Fair Business Practices Act. She ultimately prevailed. This case reinforced that insurers cannot simply point to the contestability window as a catch-all excuse when avoiding payment.
What We’ve Learned About the Contestability Clause
These real-world examples show a repeated pattern: life insurance companies using the two-year contestability window to deny claims based on minor or irrelevant omissions. But contestability does not give them free rein. Courts often side with beneficiaries when insurers:
Fail to investigate before issuing a policy
Accept premiums despite having sufficient information
Base denials on unrelated or immaterial issues
Our law firm has helped many families recover denied life insurance benefits through litigation, settlement negotiations, and bad faith claims. If your claim was denied within two years of policy issuance, legal action may be your best option.
FAQ
What is a life insurance contestability clause?
It’s a contractual provision that allows an insurer to investigate and potentially deny claims within the first two years of a policy if the insured allegedly made misstatements on the application.
Can a life insurance company deny a claim for any reason during the contestability period?
No. They must prove that the misrepresentation was material and intentional. Denials must be based on clear evidence, not vague assumptions.
What if the insured died of something unrelated to the alleged misstatement?
Even if the application was incomplete, if the cause of death had nothing to do with the alleged misstatement, courts often rule in favor of the beneficiary.
Do I need a lawyer to fight a contestability clause denial?
Absolutely. These cases are complex, and insurance companies have vast legal resources. Hiring a life insurance attorney greatly improves your chances of reversing the denial or winning compensation.