Can a life insurance policy be cancelled by the insurance company for a health issue they knew about?

I have a blood clotting disorder, they knew when I got life insurance and it is in the paper work.. I just worry that if I have a complication that they will find a way to back out and not pay my family. I have heard of companies that found a way to skip payment. Is that legal? I don't want to waste money if they won't pay in the end

Asked by Katie Greene

2 Answers

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Answered by Lynne Crow, Insurance Agent in Paramus, NJ
Your policy is a contract between you and the insurance company. If they have all the facts they shouldn't be able to cancel it if your health became worse. Take a look at your policy. There should be an incontestability clause in it that describes when a policy can be cancelled for misinformation. It is usually two years. | 08.10.16 @ 18:45
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$commenter.renderDisplayableName() — {comment} | 12.09.16 @ 13:44
I agree with Lynne Crow. Often, I hear this same question, and when I trace it back to its origin, it seems to come from the insurance domain but is connected to "post claim underwriting" which is a health insurance phenomenon. You've heard it before: I developed a disease and my carrier dropped me. Usually, it is when the carrier is avoiding a claim in individual health insurance and they use misstatements and omissions on the application to cancel coverage. This is not the case with life insurance, however. All of the underwriting is done before approval of life insurance and before you accept the contract. Once accepted and paid and put in force, your contract operates the way Lynne detailed and there is no further underwriting (which is the process of investigating the mortality elements that exist with an applicant, including your state of health).

Kirby | 08.10.16 @ 21:54
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$commenter.renderDisplayableName() — {comment} | 12.09.16 @ 13:44
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