President, Lane Independent Agency, Southern California
If an insured commits suicide within the first two years of coverage, the claim would be denied under virtually any company. Also, if someone commits a material fraud in their application and that is detected within the first two years, the policy would be cancelled with the money refunded. Otherwise there would be no valid ground for refusing a claim on life insurance. However, some lesser companies do all they can do to deny a claim or to delay payment. On the other hand, New York Life is a prompt payer on claims and is proud of that fact.
All life insurance companies are regulated by state insurance commissions regarding payment of claims, and rating agencies will rate them poorly if they are slow or negligent in paying claims. Only suicide is universally not covered during the first two years of the policy, although companies sometimes exclude other things (such as death occurring while committing a felony).
Death during the first two years of the policy is during the "contestibility" period. If the Insured dies within two years after taking out the policy, insurance companies may their review medical records and life insurance application to be sure that they were forthcoming when applying for their policy. If they lied or purposefully omitted something that was required by the life insurance agency, the claim could be denied. If they were truthful, or if the insurance company did not ask about that particular detail, their claim will be paid.
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Death during the first two years of the policy is during the "contestibility" period. If the Insured dies within two years after taking out the policy, insurance companies may their review medical records and life insurance application to be sure that they were forthcoming when applying for their policy. If they lied or purposefully omitted something that was required by the life insurance agency, the claim could be denied. If they were truthful, or if the insurance company did not ask about that particular detail, their claim will be paid.