Life Insurance Contestability Period: The Two-Year Rule and the Suicide Clause

How the contestability period works

Arizona requires life policies to include a provision making the policy, excluding disability and accidental death benefits, “incontestable except for nonpayment of premiums, after it has been in force during the lifetime of the insured for a period of two years from its date of issue” (A.R.S. § 20-1204). Most states use a similar two-year period.

If the insured dies within that window, the insurer typically requests medical records and compares them with the application. A claim can still be paid in full if the answers were accurate.

What insurers look for

• Undisclosed medical conditions, diagnoses, or treatments
• Tobacco or nicotine use
• Dangerous jobs or hobbies
• Other coverage or prior declined applications, if asked

A material misstatement can lead to a denial, or to the benefit being adjusted to what the premium would have bought with accurate information, depending on the policy and state law.

The suicide clause

Arizona allows a life policy to exclude death by suicide within two years of issue, and within one year after any increase in the death benefit, for the increased amount (A.R.S. § 20-1226). Insurers often refund premiums paid if the exclusion applies. Group life policies are handled differently.

If you or someone you know is struggling, call or text 988 to reach the 988 Suicide & Crisis Lifeline.

How to avoid contestability problems

• Answer every application question completely and accurately, including medications and tobacco use.
• Keep a copy of your application with your policy, and tell your beneficiaries where it is.
• If you replace a policy, remember the new one starts a new contestability period; see having more than one policy.
• Pay premiums on time so the policy doesn’t lapse.

Worked example

Illustrative only: an applicant doesn’t mention a recent sleep apnea diagnosis and dies in a car accident 18 months later. Because the death is within the contestability period, the insurer may review medical records. If it decides the missing information was material, meaning it would have changed the decision or price, it may deny the claim and refund premiums, or adjust the benefit, depending on the policy and state law. If the application was accurate, the claim is typically paid even though the death was early.

What beneficiaries can do if a claim is contested

1. Ask the insurer for the specific reason in writing and a copy of the application.
2. Gather medical records that support the answers on the application.
3. File a complaint with your state insurance department, such as Arizona DIFI, if you think the decision is wrong.
4. Talk with an attorney who handles life insurance claims, especially for large benefits.

After the period ends

Once the contestability period passes, insurers generally can’t contest the policy over misstatements on the application, although rules vary by state and some allow exceptions, such as nonpayment of premiums. Keep paying premiums and keep the policy in force; see grace periods.

Contestability period FAQs

Related guides

• How to file a life insurance claim
• Term life insurance
• Can you have more than one life insurance policy?
• Life insurance for smokers
• No-exam life insurance
• Life insurance quotes
• Life insurance with depression or anxiety
• Life insurance for marijuana users
• Life insurance with a DUI
• Life insurance grace period and reinstatement
• Life insurance medical exam

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