When purchasing a life insurance policy in Massachusetts, most people believe that their loved ones will receive financial protection without complications. However, there are key aspects of a life insurance policy that individuals must understand to ensure that their benefits will be available when needed. One important aspect is the contestability period, which plays a significant role in determining when and how life insurance companies can challenge or deny a claim. For families relying on life insurance proceeds, understanding the contestability period is crucial to safeguarding their financial future. At,Trief & Olk , we are here to guide you through the legal process and help you navigate the complexities of your case.
What Is the Contestability Period?
In Massachusetts, as in many other states, life insurance policies include a contestability period. This is a specific window of time, typically lasting two years from the date the policy becomes effective, during which the insurance company can review the policy for any errors or misrepresentations made by the policyholder. If the insurer discovers issues during this period, such as inaccurate information or omissions on the application, they have the right to challenge the validity of the policy.
The contestability period gives insurers the ability to protect themselves from fraud or inaccurate information provided by the policyholder. Common issues that may lead to an insurer contesting a claim include the policyholder failing to disclose a pre-existing medical condition, misrepresenting their smoking habits, or providing false information about their occupation. These types of inaccuracies can affect the premiums the policyholder pays and, ultimately, the risk the insurer is taking on by providing coverage.
What Happens if a Claim Is Filed During the Contestability Period?
If a policyholder passes away during the contestability period, the life insurance company has the right to investigate the claim thoroughly before paying out any benefits. The insurance company will typically review the policyholder’s original application to ensure that all the information provided was accurate and complete. This investigation may involve requesting medical records, speaking with doctors, or reviewing other documents to confirm the policyholder’s health status at the time the policy was issued.
If the insurance company finds discrepancies or evidence that the policyholder provided false information, they may deny the claim. This could mean that the beneficiaries do not receive the intended payout, which can create significant financial difficulties for the family. In some cases, the insurance company may offer to refund the premiums that were paid for the policy rather than paying the full death benefit.
However, if the insurance company finds that the policyholder’s application was accurate and there were no misrepresentations, the claim should be paid out in full. It is important to note that even if the insurer conducts a detailed investigation, they must do so in a timely manner to avoid unnecessary delays in paying the claim.
What Happens After the Contestability Period Ends?
Once the contestability period ends, the life insurance policy becomes much more secure for the policyholder and their beneficiaries. After the two-year period has passed, the insurance company loses the ability to contest the policy based on misrepresentations or inaccuracies on the application. This means that, in most cases, the insurer must pay the death benefit, even if they later discover that the policyholder made an error or omission when applying for coverage.
While this may provide peace of mind for policyholders and their families, there are still a few exceptions to this rule. For example, if the insurance company discovers that the policyholder committed fraud, such as deliberately providing false information with the intent to deceive, they may still have grounds to deny a claim, even after the contestability period has ended. Similarly, if the policyholder dies as a result of a cause that is excluded from coverage under the policy, such as suicide or a risky activity not covered by the policy, the insurance company may still refuse to pay the death benefit.
Suicide Clause and the Contestability Period
Most life insurance policies in Massachusetts include a suicide clause, which specifically addresses what happens if the policyholder dies by suicide during the contestability period. Under this clause, if the policyholder commits suicide within the first two years of the policy’s issuance, the insurance company is not required to pay the death benefit. Instead, they will typically refund the premiums that were paid up to that point.
We contacted Trief & Olk to help us with a life insurance issue and Shelly Friedland was the attorney assigned to our case. Before Shelly took our case she explained to us that the likelihood of our success without going to court was possible but not likely. Unfortunately we did not get the outcome we had hoped for but it was our decision to not move forward and have our case litigated. Shelly is very knowledgeable and was very straight-forward in her assessment of our case as we moved forward. She was very patient and thorough in answering our questions. She always responded in a timely manner and listened to our concerns. We would certainly recommend Shelly and would use her firm again in the future.” - John Ramig If there is any possibility of winning your life insurance case – this is the place to do it for you. They are efficient, honest and will achieve the best possible outcome. Shelly Friedland worked on my case where a life insurance policy had lapsed and was even a few days beyond the grace period. Farmers had rejected my claim twice and was unwilling to take a second look. Shelly was able to get them to pay the entire claim without going to court, and the full amount was deposited in my account within a couple months. Highest recommendation.” - Kathleen Brown Trief & Olk is a superior law firm. Their attorneys and other legal professionals have a brilliant understanding of the law and the litigation process. They diligently perform their work in an efficient, strategic and cost-effective manner to ensure the best possible outcomes for their clients. - Christopher Hughes
The suicide clause is designed to prevent individuals from purchasing a life insurance policy with the intent of committing suicide shortly afterward, knowing that their beneficiaries would receive a large payout. After the contestability period ends, however, the suicide clause typically no longer applies, and the insurance company is required to pay the death benefit, even if the policyholder’s death is ruled a suicide.
It is important for policyholders and their families to be aware of this clause and understand how it affects their life insurance coverage. If a claim is filed due to suicide during the contestability period, the insurance company may conduct a thorough investigation to determine the exact cause of death and whether it falls under the terms of the policy’s suicide clause.
Common Reasons for Contesting a Life Insurance Claim
Life insurance companies in Massachusetts may contest a claim for various reasons during the contestability period. Understanding the most common reasons can help policyholders avoid potential issues when applying for coverage. One of the most frequent reasons for contesting a claim is the omission or misrepresentation of a medical condition. If a policyholder fails to disclose a pre-existing condition or provides inaccurate information about their health, the insurance company may argue that the policy was issued based on false information.
Another reason for contesting a claim is the policyholder’s lifestyle habits. For example, if the policyholder claimed to be a non-smoker but was later found to have been a regular smoker, the insurance company may challenge the claim. Similarly, if the policyholder’s occupation was misrepresented and the insurer later discovers that the policyholder was engaged in a high-risk job, they may contest the claim.
The insurance company may also challenge a claim if there is evidence of fraud or intentional deception on the part of the policyholder. This can include falsifying documents, providing false identification, or engaging in other deceptive practices when applying for coverage. Insurers take these issues seriously, and if fraud is discovered, it can lead to the denial of a claim, even after the contestability period has expired.
20% The annual average number of life insurance claims denied. $50 Million The yearly average dollar amount of claims denied by life insurance companies. .2% The number of claims appealed annually by consumers.Life Insurance Denial Statistics
How to Protect Your Life Insurance Claim
To protect your life insurance claim and ensure that your beneficiaries receive the intended benefits, it is important to be truthful and accurate when applying for coverage. Providing complete and accurate information about your health, lifestyle, and occupation will reduce the risk of having your claim contested by the insurance company. If you are unsure about how to answer certain questions on the application, it may be helpful to consult with a legal professional or insurance advisor to ensure that you are providing the correct information.
It is also a good idea to review your life insurance policy regularly to ensure that the information on file with the insurance company is up to date. If your health status or lifestyle changes after the policy is issued, notifying the insurance company and making any necessary updates to your policy can help prevent future complications.
In the event that a claim is contested during the contestability period, it is important to respond promptly and cooperate fully with the insurance company’s investigation. Providing all requested documentation and answering questions truthfully can help resolve the issue and ensure that the claim is processed in a timely manner.
Settlements & Verdicts
What to Do if Your Life Insurance Claim Is Denied
If your life insurance claim is denied during the contestability period, it can be a stressful and confusing experience for your family. It is important to remember that you have options if your claim is denied. The first step is to review the denial letter carefully and understand the reasons for the denial. In some cases, the denial may be due to a misunderstanding or an error that can be corrected by providing additional documentation or clarifying information.
If you believe that the insurance company has wrongfully denied your claim, it may be necessary to seek legal assistance. An experienced attorney can help you review the policy and the circumstances surrounding the denial to determine whether you have grounds to challenge the insurance company’s decision. In Massachusetts, policyholders and beneficiaries have the right to appeal a denied claim and pursue legal action if necessary to recover the benefits they are entitled to.
Navigating the contestability period in a Massachusetts life insurance policy can be complex, and disputes with insurance companies can leave families feeling overwhelmed. If you are facing challenges with a life insurance claim, Trief & Olk can help. Our legal team has extensive experience working with policyholders and beneficiaries to resolve disputes and ensure that families receive the benefits they deserve. Contact Trief & Olk today to discuss your situation and learn how we can assist you.