What happens when a life insurance policy is contested?

When they are faced with someone contesting a life insurance beneficiary they cannot pay out the claim. What they will likely do is start a life insurance interpleader process. This means that they will put the claim in the hands of the courts to decide who the beneficiary is that is going to get paid.Click to see full answer. Also question is, how long do you have to contest a life insurance policy?Most insurance companies have a two year contestable period when activating a new policy, meaning that if an insured dies within two years, the company may rescind the policy entirely upon a finding of fraud or misstatements made in the original application.Additionally, can a life insurance beneficiary be challenged in court? Whatever the reason, when a life insurance policy is disputed, it becomes a legal issue and a matter for the courts to decide, says Feldman. It can be particularly difficult to prove fraud – that the policyholder was coerced into changing a beneficiary by someone who only came into his or her life toward the end. Regarding this, can a life insurance policy be contested after 2 years? The life insurance contestability period is a short window in which insurance companies can investigate and deny claims. The period is two years in most states and one year in others. Life insurers then included clauses in their policies saying they could not contest claims except during the contestable period.What would void a life insurance policy? Other Exclusions That Could Void Life Insurance Coverage Suicide: Just about every insurance policy known to man includes a provision for suicide. Unfortunately, if your policy is less than two years old and death was the result of suicide, your claim will be denied.