Life Insurance Disputes: Understanding the Contestability Period in Ontario
Life insurance provides financial security to loved ones after the death of a policyholder. However, beneficiaries may face unexpected hurdles when filing a claim, especially during the contestability period. If you’ve had a life insurance claim denied, understanding the reasons and knowing your legal options is crucial.
In this blog, we’ll explain the contestability period in Ontario, common reasons for claim denials during this time, and how beneficiaries can challenge a denied life insurance claim.
What is the Contestability Period in Life Insurance?
The contestability period is a timeframe—typically two years from the date a life insurance policy is issued—during which the insurer can review and deny claims due to misrepresentation or omissions in the application.
This period does not mean that insurers automatically deny claims, but they do have the right to investigate and verify details during this time. The policy itself remains valid, but the insurer may use this window to challenge the legitimacy of the claim based on the information provided in the application. Once the contestability period ends, claims are generally harder for insurers to deny unless fraud is proven.
Why Claims Are Denied During the Contestability Period
A denied life insurance claim during the contestability period often stems from issues in the application process. Insurers may claim the policyholder:
- Misrepresented Medical History
Incomplete or inaccurate information about past medical conditions, treatments, or medications can lead to denial. - Omitted Risky Behaviours
If the policyholder engaged in high-risk activities like smoking, extreme sports, or substance abuse but did not disclose them, the insurer may reject the claim. - Errors in Application Forms
Even honest mistakes in paperwork—like incorrect dates or misunderstanding questions—can trigger a denial. - Undisclosed Financial or Occupational Details
Some policies evaluate financial and occupational risks. Inaccurate or missing information in these areas can result in disputes.
Challenging a Denied Life Insurance Claim
Having your life insurance claim denied is distressing, but you can take steps to challenge the decision.
- Request a Detailed Explanation
Start by asking the insurer for a written explanation of the denial. Insurers must provide reasons, such as misrepresentation or policy exclusions. - Review the Policy Terms
Carefully read the policy to understand the contestability period, exclusions, and conditions. This will help identify whether the denial is valid. Respectfully, an experienced life insurance lawyer is in most cases better suited to interpreting and analyzing the policy. - Provide Additional Evidence
Prior to providing any additional evidence, you should seek out and retain counsel that is familiar with both life insurance claims and the insurer. You do not want to submit documentation that the insurer may use to undermine your claim and an experienced life insurance lawyer will be aware of the documentation that should not be submitted. - Consult a Life Insurance Lawyer
Navigating disputes can be complex. A life insurance lawyer can help assess the validity of the denial, negotiate with the insurer, or escalate the matter to legal proceedings if necessary.
Common Myths About Denied Life Insurance Claims
- Myth:
Claims during the contestability period are always denied.
Reality: Not all claims are denied. Insurers investigate claims more thoroughly but cannot arbitrarily reject them. - Myth:
Contestability only applies to new policies.
Reality: Contestability applies if the claim occurs within the first two years of the policy’s effective date, even for reinstated policies. - Myth: There’s no recourse if a claim is denied.
Reality: Beneficiaries, with the assistance of a lawyer, can challenge denials through evidence, negotiation, or legal action.
How Can Aaron Waxman and Associates, P.C. Help?
Aaron Waxman and Associates, P.C. provides invaluable support for those facing denied life insurance claims, including claims denied during the contestability period. Our team thoroughly examines your policy and the insurer’s reasons for denial to determine the best course of action.
We gather the necessary evidence to strengthen your case and advocate on your behalf to resolve disputes. If litigation is required, we’ll represent you in legal proceedings to secure the payout you deserve.
Conclusion
Understanding the contestability period and your rights as a beneficiary is vital when facing a denied life insurance claim. While insurers have the right to investigate claims during this period, beneficiaries are not powerless. By seeking legal guidance, you can challenge unjust denials and secure the benefits owed to your family.
Don’t navigate this process alone. Contact Aaron Waxman and Associates, P.C. at 416-661-4878 or awaxman@awaxmanlaw.ca. for a free consultation to discuss your case and legal options.
We offer a free initial consultation that can be arranged at a date and time of your choosing and at your convenience.
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- This blog is for informational purposes only and is not meant to substitute legal advice. Please read our disclaimer for further information.
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