What Is The Contestability Period?

The contestability period is an important detail of your life insurance policy. The time period of contestability usually lasts about two years from when your claim is to be paid. During this period your life insurance company has the legal right to investigate a claim and the insured's information on their life insurance application.

If the life insurance company determines that information has been falsified on your application they may deny your claim to your beneficiary or pay a lesser amount. For example if you state you have never smoked on your application, but you die of a disease that often afflicts smokers, your life insurance company will investigate the claim. If your medical records show that you were a smoker before death, you may not have your claim denied and no money paid out.

Some insurance companies will adjust the amount of money you paid in premiums to the smoker's rate and have a corresponding death benefit, which will obviously be less than what you originally planned. It's never a good idea to lie on your life insurance application. You would not want to take the chance of leaving little or nothing behind to your beneficiaries.

Sources

1. Life Insurance Glossary. Retrieved May 12, 2008, from http://www.smartmoney.com/insurance/life/index.cfm?story=lifeglossary#twelve