In the United States, a life insurance claim can be contested within the first two years of the policy being in force. Typically, this means that if there is any inaccurate information on the application that would have resulted in the policy not being issued, the insurance company has the right to void the policy. This rule applies regardless of whether the inaccuracy is related to the cause of death. For instance, if an individual misrepresents their cancer status but passes away due to an unrelated car accident, the death benefit may be withheld. Furthermore, whether the inaccuracy was intentional or accidental is immaterial; what matters is whether it would have affected the policy's issuance.

While it might appear unfair for a policy to be denied due to inaccuracies, consider the implications in a society without such regulations. Without these rules, individuals could exploit the system by providing false information to insurance companies, leading to increased premiums to cover the resulting losses. Ultimately, this could render life insurance unaffordable for the majority of the population. Therefore, there needs to be a delineation somewhere to sustain the viability of the life insurance system.

In the United States, each state has its own rules about contestability. Here are some example statutes that discuss two years: New York , Texas, and Illinois; while the Missouri statute discusses one year.

Investigation

A typical investigation often commences with reaching out to and interviewing the beneficiary and/or the next of kin. A comprehensive statement is recorded concerning the insured individual's health history within the specified timeframe outlined on the application.

Subsequent actions may involve reaching out to and interviewing pertinent medical sources, acquiring past medical records, and conducting reviews. Additionally, canvassing nearby pharmacies and hospitals may be conducted. Depending on the circumstances, further avenues of information will be explored.

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