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What’s the Two-Year Contestability Period On A Life Insurance Policy?

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Life insurance policies are purchased to protect the people you’d leave behind if you were to die. A policy is designed to pay out a set amount of money to your beneficiary in the event of your death. However, there are a few times when that might not happen. A life insurance company can deny your beneficiary a payout in some cases. 

You’re most likely to run into these situations during what’s called the two-year contestability period.  The two-year contestability period is the two years right after you buy a life insurance policy. During this time, an insurance company can review your application if a death claim is made.  

The word contestability means a contest or dispute to a claim. When it comes to legal documents like a life insurance policy, the death benefit claim is being what is disputed.

The company can delay payout while investigating the death and information on the application. Your beneficiary’s claim could be denied if the information you provide in your application was untrue or misleading to get a better rate or obtain coverage altogether.  

This doesn’t happen often. In fact, you could die within a few days of your new policy going into force, and your beneficiary would still get the full policy payout. 

The claim should be paid as long as you were truthful in your application.  However, there is a small risk during the contestability period that the claim could be denied. 

So, how can you avoid a claim denial during this period?  Read on to learn all about the two-year contestability period and how you can make sure that it’s nothing for you to worry about.

The 2-Year Life Insurance Contestability Period

The contestability period exists to protect insurance companies from fraud.


It allows the insurance company to reopen your entire application to view any mistakes made during the underwriting process. 

Think of it this way.

If you lied on your application to secure a low rate or coverage that you may have not qualified for in the first place and died within the first two years of owning the policy, the insurance company would owe your beneficiary the full death benefit amount.

The company would lose the money from your payout and the money from the increased premiums you would have been charged had you been truthful on your application.

For example, let’s say a customer named Chris buys a life insurance policy. Chris knows he has had a serious heart condition in the past, but he doesn’t disclose any of this information on his application.

Chris’s application is approved for coverage at an excellent health risk classification with a death benefit amount of $750,000 for only $45.00 a month. After 11 months, Chris dies due to the heart condition he omitted from his application, and his beneficiary files a claim to collect the death benefit.

The insurance company would now owe the beneficiary $750,000 after only receiving a total of $495.00 in premium payments from Chris.

Since it is within the two-year contestability period, the insurance company would look back at Chris’s application and medical records to verify that nothing was misrepresented during underwriting, leading to higher risk classification or even a potential decline for coverage altogether.

If the insurance company determines that Chris knew about his heart condition and lied on the application to secure a low rate, they might deny his beneficiary’s claim.

If the insurance company does not deny the claim, they might also figure out what his rate would have been having him been truthful and subtract the difference in premiums from his payout.

So, say it was determined that Chris’s premiums should have been $200 per month versus the $45.00 per month that he was approved at. Over the 11 months, that would be $2200, or $1705 more than what Chis had paid over an 11 month period. The insurance company would deduct that $1705 from the total payout amount.

Obviously, a deduction for a recalculated premium is better than denying the death benefit, but that’s definitely not a situation you want to chance for your beneficiaries. There is no guarantee that it would happen.

Plus, the contestability period doesn’t only apply if your omitted health condition is what caused your death. The life insurance company will investigate fully during the contestability.

Any misrepresentation could cause your death benefit not to be paid out. So, if you died in a car accident, but the life insurance company finds you had a cancer diagnosis you knew about but didn’t disclose, they could still deny the claim.

Within two years of a new life insurance policy, death automatically opens the doors for the insurance company to investigate to make sure there was no fraud committed during underwiring.

The insurance company will review information such as medical records, prescriptions checks, and police reports to help determine if any information was false when initially applying for the life insurance coverage.

The Contestability Period and Lifestyle Information

It’s not just health information that the insurance company will check if you die during the contestability period. They’ll also make sure they know the truth about any lifestyle information disclosed on your application. This includes things like:

  • Occupation
  • Hobbies (rock climbing, scuba diving, sky diving, vehicle racing, etc.)
  • Drug use
  • Alcohol use
  • Tobacco use

For example, if amateur racing is a major hobby of yours that wasn’t disclosed on your application, and you were to die while racing, the death benefit claim could be denied.

Just like with an undisclosed health condition, the company might also calculate what you would have been charged if you’d been truthful about your hobby. They’ll then subtract the difference from the payout amount.

IMPORTANT: Having a “high-risk” lifestyle does not necessarily you will be disqualified from getting life insurance coverage. The key is, to be honest with the application question you are being asked so the company can document your responses and underwrite you with the appropriate health risk classification.

Other Types of Insurance Fraud

The contestability period is also used to protect the insurance company from more sinister types of fraud. We’ve all seen news stories about people being killed for the payout of the life insurance policy.

While this type of criminal fraud is thankfully rare, insurance companies need to be aware of it and be able to protect against it. It’s one reason why contestability periods and other life insurance rules exist. 

This doesn’t mean that all deaths in the first two years will result in murder investigations, of course. However, these deaths are more likely to be looked at very closely, and anything that looks suspicious will be investigated.

Are all Claims Investigated?

Not all deaths within the contestability period will be investigated. An investigation during the contestability period isn’t a given. However, the company has the legal right to investigate should they choose, and it is stated in every life insurance contract issued that they have that right.

Claims are investigated on a case-by-case basis. When an examiner looks at the claim and cause of death, they’ll decide if there is a reason to investigate it. Investigations are generally triggered if that examiner has reason to suspect there might have been missing information or fraud committed on the application.

For example, an insured who had claimed that they were a non-smoker, dying of lung cancer during the first two years of their policy might trigger an investigation.

As part of the investigation process, the insurance company will request and review medical records. They will also view lab results to find out if the applicant had a history of tobacco use. The results will then be matched to the tobacco questions answered by the insured on the application.

On the other hand, a death claim may not be investigated if death occurred within the first two policy years if the cause of death was due to an accident such as a car accident.

Provided the insured was not at fault, and the police report didn’t show any evidence of drugs or alcohol use in the insured’s system, it’s not highly likely for the insurance company to have to fully investigate the death claim for any fraud or misrepresentation of application questions.

A claim of this nature should be made rather quickly and paid to the beneficiary.

A claim being investigated doesn’t necessarily mean it will be denied either. Many times the company will investigate but find no misrepresentation. In that case, the investigation will end with the claim being paid out.

In most cases, your beneficiary will also earn interest during the time the investigation takes. So, while an investigation can be stressful and frustrating, if it’s found you were truthful on your application, your beneficiary will get the entire payout, plus interest.

When a Claim Is Denied or Adjusted

Your claim will be denied or adjusted when the insurance company does find a misrepresentation. The company’s decision will depend on your specific case.

However, as a general rule one of two things will happen:

  • If the company finds new information that would have resulted in an initial denial of coverage: The death claim will be denied.
  • If the company finds new information that would have resulted in you paying a higher premium:  The difference in premiums will be deducted from the payout amount.

The company will let your beneficiary know the results of their investigation and will release any payout that’s owed.

Do Mistakes Cause Denial?

Not every misrepresentation on a life insurance application is a purposeful deception. Sometimes, you might make a mistake on your application.

Common mistakes include:

  • Forgetting to list a medication
  • Listing your weight incorrectly
  • Underestimating how often you participate in a hobby
  • Underestimating the extent of a health condition

As long as the error is small, your claim will most likely still be paid. However, a large error, even if you weren’t trying to mislead the insurance company intentionally, could result in adjustment or denial.

For this reason, it’s always best practice to answer all of the questions on a life insurance application carefully. Make sure you provide the most accurate information you can.

TIP: Once your life insurance policy has been approved and placed in force, you will receive an actual life insurance contract along with a copy of the application questions you had initially completed. It’s always best to review everything over once you receive it to make sure all the information is correct.

Reasons a life insurance claim might be denied:

Always be as honest as possible on your life insurance application.

Suicide Clause vs. Contestability Period

Most life insurance policies won’t payout if you die by suicide within your policy’s first two years. At first glance, this might sound like it’s part of the contestability period. 

After all, it’s a death that occurs during the first two years of your policy, and it’s being contested. However, that’s not actually the case. This rule is known as a suicide clause and is a separate part of the policy agreement. 

Companies won’t pay for death by suicide in the first two years as a way of reducing the odds that someone would buy a policy with the intention of committing suicide and leaving money behind for their families. Life insurance is a security net for your family if you die. Insurance policies are not intended to be used as part of a plan to die

This rule also applies to physician-assisted death and other right-to-die situations, even if you live in a state where this is legal. Currently, this includes:

  • The District of Columbia
  • California
  • Colorado 
  • Hawaii 
  • Maine 
  • New Jersey 
  • Oregon 
  • Vermont 
  • Washington 

The suicide is clause is only in effect for two years. After two years, the company will pay the death benefit even if the cause of death is suicide. If an insured commits death within the first two years, the life insurance company should refund all premiums paid to the named beneficiary.

Every life insurance policy has a written suicide clause in the contract.

Need to Talk?

If you or some you know are feeling hopeless, suicidal, or like you’re in danger of harming yourself please reach out for help. You can call the National Suicide Prevention Lifeline 24/7 to talk to someone and get support.

Claims After the Contestability Period Ends

It’s still possible for an insurance company to make sure no fraud was committed after two years. However, it’s a lot less likely.

For one, a claim several years down the road is less likely to trigger an investigation.

Think of it this way, if you passed away from a heart condition six months after you take out a life insurance policy, it would be reasonable for the life insurance company to question if you already knew you had the condition.

However, if you die of a heart condition 15 years down the road, it’s reasonable to assume you developed the condition in the past 15 years and didn’t have it when you first applied.

Another reason claims are less likely to be investigated after two years is due to the incontestability clauses.

An incontestability clause is written into most life insurance policies and states that a claim can’t be investigated after two years. That means that a claim can’t be denied once the two years are up due to misrepresentation or error.

Not all policies have this protection in place.

Read your policy closely to see if it’s included. You can put an incontestability clause on your list of features to look for if you’re still shopping for coverage.

When the Contestability Period Resets

Once you clear those first two years, your contestability period ends. Any claim will likely be paid out in full, especially if you have an incontestability clause. However, you should know that it is possible to reset your contestability period.

How? By not paying your premiums and letting your policy lapse. If your policy lapses, you’ll need to reapply, and if coverage is reinstated, it will reset your contestability period.

You’ll be subject to another two-year contestability period, no matter how long you’ve had your policy. It could also mean higher premiums or even a denial of coverage if your health has declined.

Most insurances have a grace period. Grace periods are generally around a month. So your policy won’t lapse if you’re a day late, but you should pay as soon as possible.

Call your insurance company if you’re having trouble making payments. You might be able to work out a plan that could keep your coverage from lapsing.

A second contestability period can also arise if you have a term insurance policy coming to an end and you decide to purchase a new policy. Even if that new coverage is purchased with the same insurance company, the two-year contestability period resets.

Frequently Asked Questions on the Contestability Period

Still have questions?

You’re not alone. We have gathered the most asked questions from our customers regarding the two year contestability period and life insurance to put together a detailed FAQ section.

Have a question that is not listed below? Be sure to contact us so we can get you an answer and add it to the list to help others.

Are all contestability periods two years long?

No. While two years is the most common contestability period with most of the larger well-known companies, it’s not the only one. Some companies only have a one-year contestability period. Be sure to check the details of your policy if you’re not sure.

How long does an investigation take?

It depends. Most non-contested insurance claims can take less than thirty days with most insurance companies. A contested claim that requires an investigation might take several additional weeks or months.

However, keep in mind your beneficiary will receive interest on your benefit amount. As long as it’s found a payout is owed, your beneficiary will receive interest on top of the payout when there is a delay.

You can rest assure that insurance companies will do everything possible to provide quick processing of any claim. The last thing they want is for a beneficiary to have to wait for the death benefit funds. 

The biggest hold-up on claim processing tends to be when medical records are needed and order from a medical facility. Medical records are processed by the medical facilities or a copy service with no affiliation with the life insurance company. The timeframe depends on how quickly those two parties process requests when received.

What's the best way to avoid an investigation?

The best way to avoid an investigation is to be as honest as possible on your insurance application. If the insurance company was already working with correct information, there’s nothing for them to investigate.

For example, let’s say you had diabetes and disclosed it on your application. If you were to die after falling into a diabetic coma, there would be no need to investigate.

In this case, the insurance company already knew about your diabetes, and it was factored into your premiums already. Your beneficiary would receive the full payout amount.

The application and medical questions will be obvious on the information they are requesting and how many years back they need it.

What happens if the insurance company discovers a mistake while I'm alive?

If the insurance company finds out that during the life of your policy that there was an omission or error on your application, a couple of things might happen. In some cases, the company might raise your rates.

In other cases, your policy might get canceled altogether, depending on the severity of the mistake.

If your policy is canceled, it will be reported to an agency called the Medical Information Bureau (MIB).

All insurance companies check the MIB when you apply. That means other companies will see that your policy was canceled and the reason why. That will make it very difficult to secure a new policy.

It should be noted that underwriting has greatly advanced over the last decade. The advancement has been so significant that many life insurance companies can approve coverage without an applicant having to take a medical exam.

Utilizing technology and algorithms, underwriting can pull data to verify the accuracy of application questions avoiding the potential of mistakes made during the application process.

What if I die during the contestability period from a health condition I didn't know I had?

The claim will be paid if you die during the contestability from a condition you weren’t yet diagnosed with. Even if you’ve had the condition for years, if you didn’t know, it hadn’t been diagnosed, and it didn’t show up on your medical exam or medical records, your full benefit should payout without any issues.

This isn’t considered fraud, or even a mistake, because you didn’t have the diagnosis yet.

What if I didn't disclose a condition but the two-year-contestability period is over?

This is still a fraud and very risky. While it’s a lot less likely your death would be investigated after two years, it’s not impossible. Under the contestability section of a life insurance contract, it general reads the following or similar statement depending on the company:

“We cannot contest the validity of this policy or any attached riders after it has been in force during the Insured Person’s lifetime for two years from the Issue Date, except for fraudulent misstatements in the application when permitted by applicable law in the state where this policy is delivered or issued for delivery.”  

It’s never a good idea to try and lie on your application. Even if you’re able to lock in a lower rate, you could be putting your beneficiaries at risk down the road. A life insurance policy should provide peace-of-mind.

 A policy built around a lie or omission makes that security shaky at best.  Your best bet? Don’t put your loved ones in the stressful position of an investigation. Be as honest as you can on your application.

2 Year Contestability Period - Final Word

If you’re honest on your life insurance application, the contestability period shouldn’t worry you at all.

Even if you died an hour after a policy went into effect, your beneficiary would get the full payout amount if everything on your application was accurate. The insurance company is not looking for a way not to pay your loved ones but protect themselves from potential fraud.

Remember, it’s rare for claims to be investigated, even in the first two years.

Part of a life insurance company being successful is its reputation. A part of having a great reputation within the life insurance industry is a companies reputation for paying out their claims.

Insurance companies are not looking for an excuse or a way out of paying a claim as it would tarnish their reputation and ability to gain customers. It should never worry you that your beneficiary will not receive a death benefit payout should you pass as long as you answer all questions truthfully.

If you’re ready to start shopping for policies, we can help. At No Medical Exam Quotes, we can show you quotes and policies from top companies. No matter your health, situation, or budget, there’s a policy that can protect your family.

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Picture of Jeffrey Manola - Life Insurance Expert
Jeffrey Manola - Life Insurance Expert

Jeffrey Manola is the founder of No Medical Exam Quotes, an online insurance agency that strongly focuses on helping people shop for the perfect life insurance policy. He is a licensed life insurance expert and content creator for the website.

Before becoming a life insurance agent, he served in the United States Marine Corps, transitioning from serving his country to helping families find affordable life insurance coverage beginning in 2009. Since starting a career as a licensed life insurance agent, Jeffrey has helped thousands of families with their life insurance needs.

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