The Life Insurance Contestability Period: What You Need to Know About Getting Coverage

Life insurance is meant to financially protect your loved ones after you’re no longer around, but there are some parts of the process that make it more difficult for family members to get the coverage they need. One factor that can play a role in whether or not holders can get coverage after losing a loved one is the contestability period. Understanding how the life insurance contestability period affects your insurance can be life-saving.

Read on to learn what a contestability period is and how it can affect your life insurance claims.

What Is a Contestability Period?

The life insurance contestability period is the time frame within which an insurance company can question or review the details of your policy that you provided, such as your health conditions and lifestyle. The period begins the day after your policy becomes effective. The contestability period is meant to protect insurers from wrongdoing by policyholders.

Why Does the Life Insurance Contestability Period Exist?

This window of opportunity allows the insurer to determine if any information provided on the application was fabricated or falsified. If the owner dies within the first two years of getting the policy, the insurer has the right to delay payment and investigate the beneficiary's claim.

The life insurance contestability period exists for different reasons, including:

• • Fraud Prevention: This period helps insurers ensure fair coverage and pricing for all policyholders. They can investigate, detect, and prevent insurance fraud. 
• • Insurer’s Protection: This period helps insurers reduce their risk and financial losses by denying claims based on false or incomplete information.
• • Regulatory Compliance: The 2-year contestability period ensures that insurance companies meet regulatory requirements and fair industry standards. 
• • Information Verification: Insurers can confirm the accuracy of the information provided by policyholders. This verification process ensures coverage is based on a true understanding of the policyholder's circumstances.

How Long Is the Life Insurance Contestability Period in Texas?

In Texas, insurance companies have a 2-year contestability period that starts the day after the life insurance policy is implemented. During this 2-year window, the insurer can investigate a life insurance claim by reviewing the application and medical history to confirm that the material wasn't misinterpreted.

What Happens When an Insurance Company Challenges Your Claim?

When an insurance company challenges your claim, it means they are questioning its accuracy. If your claim gets challenged, here's what might happen next:

• • Request for Additional Information: The insurer may ask for more documents or clarifications on existing information. Be prepared to provide detailed records and evidence to support your claim. 
• • Investigation: The insurer may conduct an investigation to review medical records, witness statements, or other evidence. During this process, you’ll need to cooperate with the investigators to ensure a smooth process.
• • Denial of Claim/Policy Cancellation: If the insurer finds inconsistencies or inaccuracies, they may deny your claim or cancel your policy. 

If you’re facing unfair delays or your claim has been denied after complying with the insurance company’s terms, you may be a victim of bad faith. If this applies to you, you can: 

• • Consult a professional insurance lawyer like Millin and Millin
• • Negotiate with the insurance provider to resolve the dispute
• • Visit your state's insurance department to file a complaint
• • Arbitrate to reach a mutually agreeable solution

Insurance Bad Faith? Get Help from Millin & Millin Attorneys

Securing an insurance claim can be difficult, especially if the insurer acts in bad faith. If you believe your insurance company is deliberately delaying or refusing to pay benefits, you may need to get a McAllen bad-faith insurance lawyer.

With the help of an insurance lawyer, you can confidently fight for what you deserve. If you're in Texas, contact our team of McAllen insurance attorneys at Millin & Millin. We offer free consultations to help you understand your legal options.

Was your insurance claim denied? Consult an experienced McAllen insurance lawyer at Millin & Millin Attorneys.

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