| A life insurance policy is a contract between the | | | | misrepresentations." |
| policyholder and the life insurance company. If the | | | | A material misrepresentation is any discrepancy, |
| policyholder dies while the policy is in force, the life | | | | falsehood, omission, or distortions that would have |
| insurance company will pay the policyholders | | | | caused the underwriters to reject the application for |
| beneficiaries the contracted amount of money. | | | | insurance. |
| However, issues may arise in an insurance claim if the | | | | Common material misrepresentations include: chronic |
| policyholder dies during the contestability period. | | | | disease, medical history, occupation/employment, |
| That's when you need help. | | | | age, income, tobacco usage, alcohol/drug usage, |
| Although people are solicited to buy life insurance | | | | finances, other life Insurance policies, and dangerous |
| from companies and their agents you must fill out an | | | | recreational activities. |
| application before being accepted. As part of the | | | | When a person dies while they are still within the |
| process you may also have to undergo a medical | | | | contestability period, insurance companies will launch |
| exam, and give blood or urine. The life insurance | | | | an investigation to determine if the decedent made |
| application will also have a number of questions | | | | any material misrepresentations during the application |
| concerning your age, martial status, occupation, | | | | process. If the insurance company believes that |
| current health history, criminal history, and other | | | | there is a material misrepresentation, they can deny |
| information. The insurance company then reviews the | | | | the insurance claim made by the surviving loved ones. |
| application and determines if they will insure the | | | | If the beneficiaries want to contest the decision they |
| applicant, and how much money the policy will be for | | | | must file a lawsuit to contest the insurance |
| and the premium. The process of deciding which | | | | company's decision. |
| applicants to take, on what terms is called | | | | Such lawsuits may have a good chance of success |
| underwriting. During this process the company relies | | | | as many times, the alleged "material |
| on the answers you have given in making its | | | | misrepresentation" is not actually material, unclear, or |
| decisions. | | | | debatable. An attorney experienced in insurance law |
| If an applicant is approved for life insurance, but if | | | | may be able to pressure the insurance company to |
| the insured dies within the period of contestability the | | | | change its mind and pay the claim. Alternatively the |
| insurance company can deny the beneficiaries claim. | | | | insurance lawyer can sue the company for breach of |
| The contestability period differs by state and is set | | | | the insurance agreement. In many states the failure |
| by law. When reviewing the claim during this period | | | | of a company to pay a insurance claim that is |
| the insurance company will investigate and deny the | | | | unjustified will result in penalties such as interest and |
| life insurance if they find any "material | | | | in some cases attorney's fees. |