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This week we have been discussing life insurance contestability periods and how they might affect your future Texas life insurance claim. We’ve already discussed what the period of contestability is and how long it lasts (two years in Texas).

Facts Concerning Contestability Periods for Life Insurance Policies

  • You aren’t off the hook if you do not get investigated during the contestability period. If you have committed fraud during the application process, the insurance company can still deny your claim if it is clear that you lied or misrepresented yourself.
  • Reinstating a lapsed life insurance policy could mean that your two-year contestability period resets. In other words, if you do not pay your insurance premiums for so long that your policy is halted, you may face another two years in which your insurance could investigate your application.
  • Your claim could be delayed if you die during the contestability period. If your insurance company decides to investigate, your family could be stuck waiting for their payment while the investigation takes place.
  • The contestability period is different from the suicide clause. This usually states that a payout cannot be made if the policyholder commits suicide within two years of buying the policy. To fully understand the details of your suicide clause, read your contract closely.
  • It doesn’t matter what you lied about – it matters that you lied. In some cases, if an insurance company investigates within the contestability period and finds that you misrepresented yourself, they can deny your claim even if what you lied about doesn’t have anything to do with your death. 

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