Don't Lie On Your Life Insurance Application

Two Year Contestability Period

Did you know that when you sign up for the vast majority if not all life insurance policies that there is two year contestability period?

Whenever you sign up for a life insurance policy it is essential that you are truthful in answering every questions asked on the application. Too often people do not answer questions truthfully because they are afraid they will be denied or in some cases with new clients they were misled by they person signing them up.

If you take nothing from this article, tell the truth!

If you pass away in the first two years of life insurance coverage the insurance company has a right to contest or question your life insurance claim.

This clause will have no bearing on your claim as long as you did not misrepresent any information on the application.

One of the most common questions that people misrepresent in my experience has been whether you smoke or not. 

Investigation

The insurance company will investigate your claim within the two year period and if you answered no to smoking, when in fact you have a documented history of smoking there may a challenge to your claim which may cause more pain for your family in a time of sorrow.

Some of the ways an insurance company may investigate your claim may be reviewing medical records, and investigating your lifestyle in an attempt to obtain the truth. 

After the two year contestability period, the life insurance coverage is typically considered incontestable. In most cases the coverage amount that was applied for will be issued to the named beneficiary if the policy was in force and premiums paid. 

There are some instances when even after the two year period that the insurance company may have grounds for contesting the claim. 

Lapse In Coverage

Lastly, understand that if your life insurance policy has a lapse, the lapse will restart the two year waiting period. 

Make sure you keep your policy active and consider adding someone you know and trust to your policy information so that in the event you are unable to pay your policy due to sickness or incapacity, they will get a notice from the insurance company informing them of the payment being due. This will help prevent a lapse in coverage.