Today, youve seen how the investigation process works so it helps your family and friends to give the information a toy giveaways for christmas 2015 atlanta once over to ensure you havent made mistakes.
But an company likely will investigate a claim if the insured dies of a health-related cause such as a "non-smoker" who dies from lung cancer.
In fairness, this is a good question but you also have to look at the situation from the perspective of the insurance company.
Important Facts Regarding Life Insurance Contestability Period To finish, we just want to take you through some of the key bits of information you should know during the contestability period.Unfortunately, there are a few people that lie on their application forms in order to get a cheaper life insurance or a better policy.Insurance Provider Honoring If you die within the contestability period and your application comes back clean, the insurance provider must pay out even if it happens just two hours after being confirmed and this is important to remember.The contestability period is a separate issue from the suicide clause.Why allow a 2 Year Contestability Period?For the most part, suicide is hard to prove which makes this topic a sensitive one.Your family might wait longer for the money if you die during the contestability period.Under the suicide clause, the life insurance company will not pay the death benefit and will return premiums if the insured commits suicide within the first two years of the policy.If they have evidence to suggest that some information is incorrect, this is likely to trigger an investigation.Whether its because they dont think its important or that they plan to quit and hope they can do so before it ever becomes an issue, it causes problems for thousands each year.Drug/Alcohol Use, with some providers, they dont cover people who drink or regularly take drugs, including marijuana use, so some people decide to omit this piece of information.Incontestability Clause definition : makes a death benefit payout from a life insurance company incontestable after a certain period of time has passed, typically two years, regardless of any misrepresentation or concealment.You'll also face a new contestability period if you transfer the cash value of a permanent life insurance policy into a new policy, he says.If your policy lapses because you didn't pay the premium, another two-year contestability period begins if you get the policy reinstated, Rothschild says.
States passed laws to prevent life insurance companies from refusing to pay benefits just because customers made mistakes on their applications.