Life Insurance Disputes: Understanding the Contestability Period in Ontario

What is the Contestability Period in Life Insurance?

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:

1. Misrepresented Medical History
   Incomplete or inaccurate information about past medical conditions, treatments, or medications can lead to denial.
2. 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.
3. Errors in Application Forms
   Even honest mistakes in paperwork—like incorrect dates or misunderstanding questions—can trigger a denial.
4. 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.



1. 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.
2. 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.
3. 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.
4. 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?

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.