There are many reasons why a claim may be denied. If you smoke cigarettes but apply as a non-smoker is a very common one. If you did not disclose your health history properly your claim can be declined. The good news is that if your life insurance policy is over 24-months old, it is non-contestable. So the claims have to be paid.
Also many people try to file claims on term life insurance policies that have already ended. Those claims will never be paid.
Life & Health Insurance Agent, The Tooker Agency, Riverhead NY
In New York State a life insurance company can deny a claim if the insured commits suicide during the first two years of the policy being in force. The suicide exclusion period varies from state to state, but you can easily find the specifics for your state by going to your states insurance department web site.
There is precedent for an insurance company to deny a claim even after the standard two year contestable period in the case of fraud. Part of the reason for the limitation on the contestable period is to protect the insured from having his claim denied for a relatively minor misstatement on the application. However the intent was never to reward fraudulent activity. An example of fraud would be a person who knows he is HIV positive but does not disclose it on the application, then he has a friend stand in his place for the exam and blood test. Even if the insured dies after the contestable period the company can deny the claim if they can prove fraud.
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Also many people try to file claims on term life insurance policies that have already ended. Those claims will never be paid.
There is precedent for an insurance company to deny a claim even after the standard two year contestable period in the case of fraud. Part of the reason for the limitation on the contestable period is to protect the insured from having his claim denied for a relatively minor misstatement on the application. However the intent was never to reward fraudulent activity. An example of fraud would be a person who knows he is HIV positive but does not disclose it on the application, then he has a friend stand in his place for the exam and blood test. Even if the insured dies after the contestable period the company can deny the claim if they can prove fraud.