When you buy life insurance, you’re purchasing financial protection for a beneficiary. In the event of your death, your beneficiary will receive a payout, called a death benefit, from the life insurance company. The death benefit should be high enough to pay for the expenses you left behind that the beneficiary will be responsible for.

But say you die shortly after taking out the policy. Your beneficiary should still be eligible to receive the death benefit, but there’s a small risk that life insurance company may review your application and decide to deny the death benefit or reduce the amount. The interval during which the insurance company may review your policy usually lasts two years after the day the policy goes into force, and it’s called the contestability period.

• The life insurance contestability period
• What contestability means for the death benefit
• Beware of resetting the contestability period
• The suicide clause
• After the contestability period

The life insurance contestability period

The contestability period is the one to two years after your life insurance policy goes into effect when the life insurance company is allowed to review your coverage for anything you misrepresented during the application process. The carrier will want to make sure that you didn’t withhold or lie about any facts about yourself during the application process.

If you die during the contestability period and your misrepresentations come to light, then the life insurance company may cancel the policy, refuse to pay the death benefit, or subtract money from the death benefit based on the amount of premiums you should have paid. The contestability period exists to protect the life insurance company from fraud.

The misrepresentations don’t even have to be related to your cause of death. If you die from choking on a pretzel, but you also had a cocaine or alcohol problem, or failed to disclose that you had five polyps removed from your colon, or claimed to be a much younger man when you’re really 71 years old, it doesn’t matter if you’re a former president of the U.S.: your policy can be canceled.

You should be up-front about your entire medical history when applying for life insurance coverage. After you’re dead, you won’t be able to explain away any inconsistencies and all that time you spent paying premiums will have been for nothing. The only way to ensure that your beneficiaries receive the benefit you paid for is to tell the truth on your application.

The contestability period usually comes into play after you’ve died, and the life insurance company needs to investigate if your death was suspicious. But if the life insurance company detects a misrepresentation in your application during the contestability period while you’re still alive, it may still cancel the policy and return any premiums you’ve paid (minus any fees) or ask you to pay higher premiums.

The contestability period even allows for nuances in your risk profile. Your life insurance company could contest your application if you claimed to be a diver, but it turns out that you frequently dived in a shark cage surrounded by great whites.

It should be noted that the carrier is unlikely to review your policy after the two-year time frame.

What contestability means for the death benefit

Just because your life insurance company is investigating the circumstances around your death does not mean that it’ll reject your beneficiary’s claim. The contestability period exists to make sure the information you supplied on your application was accurate. If it is, your beneficiaries are good to go.

Even if the information does contain some flaws, the insurer may still pay the death benefit. This will happen if the mistake is over something minor, but bigger errors mean it’s more likely that the claim could be denied or reduced. Be as meticulous as possible when applying: You don’t want to risk your beneficiaries losing out.

Beware of resetting the contestability period

Once you’re out of the two-year window, your policy won’t be subject to contestability if you die. As long as you keep paying your premiums, your beneficiaries will remain covered and receive the full death benefit.

However, sometimes people fall behind on their premiums, and their policy may lapse. When that happens, you’ll have to reapply for life insurance in order to get coverage for your loved ones again. If a lot of time has passed, you could pay higher premiums based on your age alone, and the premiums will be even higher if the life insurance company determines that you became less healthy during that time. Most of the usual steps you took when applying for life insurance the first time will have to be taken again, including retaking the paramedical exam.

You’ll also be subject to an additional contestability period. Think of it as if you were getting life insurance coverage for the first time. The contestability period resets, and if you die within the two years after your reinstatement application is in force, the beneficiaries could lose out on the death benefit just as they would during the contestability period the first time around.

The suicide clause

The life insurance company won’t pay the death benefit if the insured commits suicide within two years of taking out the policy. This rule is included in the policy as the “suicide clause,” and though it’s related to the contestability period it’s actually a separate thing.

Contestability is simply the life insurance company’s right to investigate the cause of death. If during the investigation the insurer finds that the cause of death was suicide, then it will reject the beneficiary’s claim.

The suicide clause only applies to the first two years the policy is in force. If the insured commits suicide after that period, then the life insurance company will still pay the death benefit. As with the contestability period, the two-year window resets if your policy lapses and you have to buy a new one.

If you’re feeling hopeless or like you have no reason to live, or know someone going through those feelings, please call the National Suicide Prevention Lifeline at 1-800-273-8255. Someone will be available to talk and provide support to people in need.

After the contestability period

The contestability period is the most likely time that the life insurance company will investigate any claims. But after that period is over, it’s still possible for the life insurance company to discover fraud and withhold a death benefit or reduce its amount.

Not every policy permits the insurance company to review claims after the contestability period. (This is called the “incontestability clause.”) Make sure you read your policy thoroughly or ask the carrier for help understanding your coverage if you plan to take up dangerous habits after the contestability period ends.