What a contestability investigation looks like
The insurer orders the insured’s medical and pharmacy records, and sometimes prescription databases and prior insurance applications. It then compares them with each answer on the application. A claims examiner or underwriter decides whether anything was left out and whether it would have mattered.
This review is meant to stop fraud, such as buying a policy right after a terminal diagnosis. In practice, it is also used to deny claims over small things: an urgent care visit, a prescription for a short-term problem, or a test that came back normal.
Rescission, and the refund check
If the insurer decides an answer was wrong and material, it may “rescind” the policy, treating it as though it never existed, and send back the premiums. Accepting that refund can complicate a later challenge. Call a lawyer before you deposit it.
How we respond
- We get the application and compare each question, word for word, with the records the insurer cites.
- We look at whether the question actually covered the condition at issue and whether the insured knew about it.
- We ask whether the insurer’s own underwriting rules would really have led to a different decision.
- We push back on requests for information that go beyond what the policy and the law require.
A note on your role
You may feel pressure to cooperate fully. You do need to authorize release of the insured’s records. You generally do not have to do the insurer’s investigating for it. Let us handle the communications.
Questions families ask
Do I have to answer the insurer's questionnaire?
You will usually need to sign authorizations so the insurer can get medical records. Beyond that, you generally have no duty to name the insured's doctors, list medications or sit for an interview. Talk to a lawyer before you do.
What makes a misstatement material?
Generally, a misstatement is material if a truthful answer would have changed the insurer's decision to issue the policy or its price. The standard varies by state, and some states also look at whether the answer was given in good faith.
What happens after the contestability period ends?
In most states, once the period passes the insurer can no longer contest the policy over statements on the application, with limited exceptions such as fraud in some states. Exclusions in the policy may still apply.
General information from the attorneys at Life Claim, not legal advice. Policies, plans and state laws differ, and every claim turns on its own facts.
