Tucked into the fine print of all life insurance policies is what's known as the "Contestable Period," which usually gives the insurance company within two years of the insured's death to cancel payment of a life insurance claim -- they are not obligated to pay if a material misrepresentation is found in the application. Often the insurance company will argue that the deceased purposely hid information about a pre existing condition such as cancer. Also, if there's a question about whether the deceased committed suicide, the policy's beneficiaries may not get paid.
http://www.walletpop.com/blog/2010/12/02/when-life-insurance-is-suddenly-canceled/
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It’s not surprising, as the article states it’s rare but some life insurance companies will try and weasel out of paying money owed to the companies. It’s a fact since the dawn of time that that all insurance companies will do what they can not to pay out, that is why it ‘s so important to read the fine print of any agreement and/or have a Independent Financial Advisor take a look at the insurance papers before signing into an agreement.
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