Disability Insurance: Long Term: Incontestable Provisions

Individual disability insurance policies include a provision that after a period of time, the policy becomes incontestable. In theory, these provisions mean that once the contestable period is over, an insurer has to pay a claim no matter how many lies there were on the application for insurance.

People have been known to lie about their health condition or history in order to obtain a disability income policy, thinking that they can wait out the contestability period and then file a claim.

We advise against such thinking for the following reasons:

• Despite what is written in the policy, you are not likely to be paid when the insurance company digs into the facts. As time elapses, you may tend to rely on coverage being in place that may not be there when you need it.
• A person who lies on an application to obtain an insurance policy may be subject to criminal prosecution for fraud.

If an insurance company challenges the validity of your coverage on the basis of statements you made to obtain it, it is advisable to hire an attorney for assistance. If the court finds in favor of the insurer, you may be prosecuted for criminal fraud in addition to losing your insurance benefit. To learn how to choose an attorney, click here.

If necessary, free or low cost legal help is available. Click here.

For more information, see:

• Contestability Period Defined   
• Reality, In Spite Of An Incontestable Provision

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