When a loved one passes away, the last thing anyone expects is a life insurance claim to be denied. Unfortunately, insurance companies sometimes look for reasons to avoid paying out claims, leaving beneficiaries in a difficult and stressful situation. One of the most common reasons for a denial is something known as the two-year contestability clause. If you’re a beneficiary facing this challenge, it’s important to understand how this clause works and how it affects the claim process.
The Two-Year Contestability Clause Explained
The two-year contestability clause is a provision in life insurance policies that gives the insurance company a period of time—usually two years—after the policyholder’s death to review and potentially contest the validity of the policy. During this period, the insurance company has the right to investigate the policyholder’s history, including their application for life insurance, to determine whether any information was withheld or misrepresented. If the company finds something it considers to be a material misrepresentation, it may deny the claim.
While this clause is a standard part of most life insurance policies, it can be unsettling for those who rely on the policy’s death benefit to support their loved ones after they are gone. As a beneficiary, you might feel confused, frustrated, and even worried about the future. It’s natural to have concerns about whether your loved one’s life insurance policy will be honored, especially when faced with the possibility of a denial due to this clause.
How the Clause Affects Beneficiaries in New York
In New York, the two-year contestability clause means that an insurance company has two years from the date of the policyholder’s death to contest the claim. This could happen for various reasons, such as if the insurance company believes that the policyholder did not fully disclose their medical history or any other critical information at the time they applied for the insurance.
However, after this two-year period, the contestability clause no longer applies. This means that if the policyholder has passed away more than two years after the policy was issued, the insurer is generally unable to contest the policy, even if there are concerns about misrepresentation or omissions. At this point, the claim should be paid out, and the beneficiary can receive the death benefit without the insurer being able to challenge the validity of the policy.
This rule helps to protect beneficiaries from lengthy delays or denials of claims after a substantial period of time has passed. The purpose of the two-year contestability period is to give the insurer time to ensure that the policy was issued based on accurate and truthful information. Once that time has passed, the policy is considered “locked in,” and the insurer can no longer back out of the agreement.
Potential Challenges During the Contestability Period
While the two-year period exists to protect the insurance company, it can be a difficult time for beneficiaries. The insurer may challenge a claim during the contestability period if it finds something in the policyholder’s application that it believes to be inaccurate or misleading. This could be as simple as failing to disclose a medical condition, or it could involve more serious issues like falsifying information to qualify for the insurance policy.
If the insurance company decides to contest the claim, the beneficiary could be left waiting for a lengthy investigation. This can cause significant stress and uncertainty, especially if the beneficiary is depending on the payout to cover funeral expenses, pay off debts, or maintain their standard of living. In these situations, it’s essential for beneficiaries to understand their rights and options to ensure they get the outcome they deserve.
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
What to Do if Your Claim Is Denied
If the life insurance company contests or denies a claim during the two-year contestability period, the first step is to carefully review the policy and the reasons for the denial. The insurer should provide an explanation for why the claim was contested, and it may offer information about what specific aspect of the application or policy it believes was misrepresented.
In many cases, the issue might be a misunderstanding or an error that can be resolved with additional documentation or clarification. However, if the insurer refuses to pay out the death benefit despite legitimate claims, beneficiaries have the option to challenge the denial. This can include filing a complaint with the New York State Department of Financial Services or pursuing legal action to fight the denial in court.
Fighting an insurance company’s denial is no easy task. Insurers have vast resources and legal teams to back their decisions, and challenging their verdict can be a complex process. If you’re dealing with a contested claim, it’s crucial to have a strong legal team on your side to navigate the system and ensure your rights as a beneficiary are protected.
How Trief & Olk Can Help
At Trief & Olk, we understand how overwhelming and stressful it can be when life insurance claims are denied. We know that the financial stability of you and your family could be at stake, and we take the matter seriously. Our team is here to help you understand the intricacies of the two-year contestability clause and provide you with the support you need to fight for the compensation you deserve.
We are committed to guiding you through the process of contesting a claim denial and will work tirelessly to gather the evidence necessary to present your case. Whether it’s dealing with misrepresentations or other issues related to your life insurance policy, we are here to help protect your interests and get you the results you need. Our team at Trief & Olk will provide the legal expertise and resources needed to ensure that your claim is handled effectively and efficiently.
In conclusion, the two-year contestability clause can be a daunting and challenging part of the life insurance process, but understanding how it works is the first step toward ensuring a successful claim outcome. If you find yourself in a situation where your life insurance claim has been denied or contested, don’t face the insurance company alone. Reach out to Trief & Olk for the guidance, support, and advocacy needed to secure a favorable result. We’re here to help you navigate this difficult time and protect your rights as a beneficiary.
