What happens during the contestability period?

During the contestability period, which typically lasts the first two years after a life insurance policy is issued, the insurer has the right to scrutinize the application for any misrepresentations made by the insured. If the insurer finds evidence that the applicant provided false or misleading information regarding their health, lifestyle, or other relevant factors, they may deny a claim based on those misrepresentations. This is a critical time frame for insurers to ensure that they are not liable for claims that arise from fraudulent or inaccurate information provided during the application process.

The contestability period protects the insurer by allowing them to investigate claims thoroughly before paying them out. If misrepresentation is found, a claim may be rejected even if it would normally be covered under the policy terms, provided the misrepresentation is material (meaning it could have influenced the insurer’s decision to issue the policy). This period helps maintain the integrity of the insurance system by discouraging applicants from providing false information to obtain coverage.